The Central Bank has stepped in to block Scotiabank from introducing a new fee for inter-bank transfers, mere hours after the financial institution told customers it was planning to charge for the service from next month.
While the country’s chief banking spokesman had previously hinted at a possible domino effect of other commercial banks following Scotia’s lead, the banking community was mum on an order from its regulator to cease any existing or planned imposition of fees on bank-to-bank electronic transactions.
On Tuesday, Barbados TODAY broke the news that the Central of Barbados was looking into plans by Scotiabank to start charging customers $1.25, from February 1, for using its online banking service and banking app to transfer funds from Scotia accounts to other local banks or credit unions, using real-time payments (RTP) and automated clearing house (ACH) transfers. The bank also informed customers that the fee would also apply to in-branch transactions.
Later that day, after briefly declaring his intention to look into the development, Central Bank Governor Dr Kevin Greenidge issued a circular to commercial banks advising them “no fees are to be imposed for electronic transactions through the ACH, inclusive of RTP transactions; and any fees that are presently currently charged for electronic transactions through the ACH shall be immediately discontinued”.
He also pointed out the Central Bank’s responsibility for oversight of the national payments systems and issued the directive under the authority of the 2021 National Payments Systems Act (NPSA).
Dr Greenidge reminded the banks that under the NPSA, the regulator – the Central Bank – has a duty to consider the interests of the consumer and is empowered to set rules to ensure transparency of conditions, including fees and information requirements for payments.
When Barbados TODAY reached out to the Manager of Communications for Scotiabank, Cindy Mohammed, who is based in Trinidad, she declined to comment.
Later, the president of the Barbados Bankers Association (BBA), Anthony Clerk said: “It is a matter between the regulator and the banks, so I have no comment to make.”
The day before, Clerk said he could not speak specifically for the banks on a matter of fees, but sought to explain why he believed the Canadian-owned bank would want to impose the levy.
“There is a cost at the back end of the [automated clearing house]. So that fee is more like a recovery cost for the bank,” Clerk told Barbados TODAY on Tuesday, adding that he anticipated that other banks would follow suit.
Scotia’s decision was communicated in an email to customers in which it declared that it was “committed to investing in the development of our digital banking platforms to ensure that they are safe and user friendly; making your day-to-day banking needs more accessible”.
It said while the $1.25 fee would be applied to RTP and ACH transfers to other banks or credit unions using the Scotia OnLine Banking and the Scotia Caribbean App, and transactions done when customers visited a branch, transfers between Scotia accounts would remain free of charge.
The email to customers had included a link to the bank’s website which provided details of the fee. However, the notice had been removed when customers checked on Wednesday.
emmanueljoseph@barbadostoday.bb
