By Emmanuel Joseph
RBC Royal Bank has reversed its decision to charge customers for bank-to-bank electronic transfers, more than a week after a Central Bank of Barbados order.
The bank, which had continued to charge for online inter-bank transactions through the automated clearing house (ACH) and the real-time payments (RTP) systems despite a directive by the Central Bank, will discontinue charging the fees, effective Friday, January 12.
The financial regulator said on Wednesday that RBC has also indicated that it will reimburse customers who have incurred these charges since the Central Bank’s January 2, 2024 directive that no fees should be applied to such transactions. These refunds will be made no later than January 19, the Central Bank added.
“We have been engaging with RBC for the past week and they have indicated that while they intend to comply with our instructions, they need some time to reconfigure their system,” explained Acting Governor of the Central Bank Alwyn Jordan. “They have also committed to reversing the ACH-related transaction charges their clients incurred from January 2, 2024 until the end of the reconfiguration period, so that they are not disadvantaged by the delay.”
He also disclosed that the Central Bank has indicated to commercial banks that it will engage with stakeholders on the question of bank fees and charges.
Last week, after another Canadian-owned bank Scotiabank announced that it would charge customers a $1.25 fee for every ACH or RTP transaction for transfers to other banks, the Central Bank instructed all commercial banks to stop the fees.
The Barbados Consumer Empowerment Network (BCEN) has applauded RBC for its decision to back off any further imposition of fees.
“Overall, RBC’s commitment to comply with the Central Bank’s directive on local online transaction fees sends a positive message about its dedication to regulatory adherence, customer satisfaction, and responsible banking practices,” said BCEN Executive Director Maureen Holder.
“Notwithstanding the fact that by proactively complying, RBC removes the risk of facing penalties and other forms of regulatory action that could be taken against the bank. Ultimately, the imposition of penalties by the Central Bank conveys a strong message about the regulatory environment, the expectations placed on financial institutions, and the consequences for non-compliance.”
The consumer advocate said commercial banks must follow the regulator’s directives and operate within its boundaries.
BCEN said it regards RBC’s reversal as a customer-centric approach and one that aligns with the principles of corporate responsibility.
“Such action will positively impact on the economic and regulatory environment within which commercial banks in Barbados operate,” Holder added.
She noted that compliance with regulatory directives contributes to building trust and confidence among customers, investors, and the broader public, as well as demonstrates RBC’s commitment to ethical and responsible banking practices in Barbados.
“The fact that both institutions were in talks and RBC offered an explanation for why it failed to comply is a win-win situation for both institutions and customers alike,” the consumer group’s leader declared. “It also shows that when necessary, financial institutions will act in the best interest of consumer protection.”
emmanueljoseph@barbadostoday.bb
