Banks pledge compliance with new rules

Commercial banks have committed to adhering to new Central Bank Market Conduct Guidelines aimed at enhancing transparency and fairness in the financial services industry, according to the head of the banking association.

The guidelines, which came into effect on Friday, set minimum standards for interactions between licensed financial institutions and their clients.

Shimon McIntosh, president of the Barbados Bankers Association said Tuesday that all commercial banks would carefully study the rules and apply them accordingly. This announcement came 24 hours after the Central Bank launched the new guidelines.

McIntosh said: “Each bank in Barbados will carefully peruse the newly published guidelines for alignment within their operations, ensuring adherence and anticipating the customary continuous dialogue between the Central Bank of Barbados and key stakeholders as together we aim for improvement in all sectors of the economy.”

McIntosh said his association acknowledges the Central Bank as the banking industry’s regulator and its jurisdiction to give guidance to the licensees under the Financial Institutions Act while pursuing its mandate of protection of consumers in the market. 

“The TBBA welcomes every opportunity to be engaged in the process of strengthening of the financial sector, ensuring clients’ needs are satisfied and now operating within a context of the global digital and technological transformation,” the banking spokesman said. “TBBA opines that over the years consumers in Barbados have been the beneficiaries of competitive product offerings in the financial sector and they should continue to benefit from a stable and competitive banking industry.

“To this end, the TBBA members will remain focused on balancing the quest for efficiency, safety and modernisation of banking service delivery, to offer all Barbadians a high-quality customer experience in all respects, with the need, like any other business operations, to honour their stakeholder commitments.”

Central Bank Governor Dr Kevin Greenidge emphasised the importance of the guidelines in maintaining consumer confidence and promoting economic growth. “Market conduct really refers to he behaviour in the practices of the various financial institutions and the interactions with consumers, the public, and all the other stakeholders,” Dr Greenidge explained. “It looks at issues of transparency, fairness, and ethical behaviour of institutions right here in terms of products and financial services.”

The guidelines address five key areas: bank fees and charges, accessibility, opening accounts, closing accounts, and complaints. They also offer recommendations for improving communication with customers.

Under the new rules, banks and finance companies must seek the Central Bank’s non-objection at least 60 days before implementing new fees or increasing existing ones. Customers must be notified 30 days in advance of approved changes. The guidelines also prohibit charges for electronic fund transfers or cash management transactions under $10 000 per day.

To promote inclusivity, physical bank locations must be wheelchair accessible and navigable for the visually impaired. Digital interfaces must accommodate various disabilities. As of July 2023, all commercial banks must offer at least one no-fee account and low-fee accounts for vulnerable groups, including pensioners, minors, and students.

The guidelines also outline procedures for opening and closing accounts, ensuring compliance with Anti-Money Laundering and Combating the Financing of Terrorism (AML-CFT) laws. Banks must provide clear timelines and periodic updates during the account application process, aiming to decide within three to five business days.

Dr Greenidge stressed the importance of these regulations for maintaining consumer confidence in financial institutions. “By issuing and the financial institutions adhering to these, it ensures that we are able to, one, provide a very transparent system, but also be fair to consumers for their confidence in our financial institutions,” he said.

The governor also highlighted the potential impact on economic growth, stating, “The more transparent you are, the easier it is to do business; it’s clear rules and guidelines, and so market conduct pulls all those together into a coherent, integrated structure that people can easily follow.” 

emmanueljoseph@barbadostoday.bb