A former Government minister has lashed out at those who believe that Government intervening in the regulation of bank fees is unnecessary.
Rather, Senator Liz Thompson believes the intervention is an important step to ensure that rates are not at a level that may be unfair for customers.
“Somebody has to protect the customers. Somebody has to protect the average consumer because the experience of those who are big businessmen is not the experience of the average black person who walks into a bank in Barbados, male or female, middle-class or working class. The experiences are different and they are different because one person walks in with a greater capital base and one … is perceived as too high-risk,” the Senate Deputy President told the Chamber debating the Financial Institutions (Amendment) Bill 2024.
Senator Thompson said the banks in Barbados are not only liquid, but they are highly profitable and she charged that they are now driven entirely by ratios and numbers and formulae that are not intended to support development but to sustain profit margins.
“That is why all through COVID and contractions in the economy the banks remained highly profitable on the fact that they are risk-averse, highly conservative and charge fees on every single transaction,” she added, saying the idea that the banks are not doing well is inaccurate
Senator Thompson, who admitted she does not engage in online banking but physically goes to the branches, said this allows her to see and hear the average Barbadian and what they face.
“The bank is charging you from the time you step through the door. If you keep money on your account, you are charged; if you go to the ATM to withdraw it you are charged for that. If you come in to withdraw it in person you are charged for that,” she explained.
Senator Thompson’s contribution followed that of Independent Senator Andrew Mallalieu who pointed out that banks operated in a competitive market where consumers have choices.
When she spoke however, Senator Thompson pointed out that the capitalist tends to see things from a different “perspective” and is content to let competition trump the need for regulation.
“I know the experience of people who look like me is not the experience of some of my other colleagues.
“When we start on that premise we fail to understand and appreciate why it is that the Central Bank has to intervene. Central Bank is not only there to guide monetary policy, the Central Bank is not only there to regulate the macro framework…Our banking system should be helping to fund the Barbadian versions of Bezos, our people, our creatives and our self-employed, our designers and our engineers and our first-movers who cannot get access to capital,” Thompson said.
She recommended that it was time for black people to stop distrusting and mistrusting and start to pool resources, make investments and help each other as happens among other ethnic communities in Barbados.
She also told the Chamber that the role of the Central Bank is to protect, promote and ensure prosperity.
“That is what this intervention is about. You cannot just be taking from your customers all the time in a situation where they have no control… and bank A and Bank B have the same charges and more,” Senator Thompson added.
The Deputy President also told the debate that another area requiring attention was in the financing facilities available to the older members of the society who are now unable to access some banking options because of their age. She suggested that this is where reverse mortgages and other instruments may be used to service the needs of this market segment.
(SP)
