The Eastern Caribbean Central Bank (ECCB) on Monday said it is concerned about the increase in commercial banks’ fees and charges across the Eastern Caribbean Currency Union (ECCU) and the effects on depositors.
The ECCB said, however, that it does not have the powers to regulate commercial banks’ fees and charges.
“As a consequence, individual banks determine their fees and charges,” the ECCB said in the statement, noting that Article 34 of the ECCB Agreement permits the ECCB to regulate the minimum interest rate paid on savings deposits.
The statement came as account holders at RBTT Bank in Kingstown on Monday (today), for a sixth consecutive day, turned out in large numbers to withdraw their savings in the wake of monthly service fees that came into affect today.
News broke just over a week ago that effective May 23 RBTT account holders in St. Vincent and the Grenadines would pay a monthly service fee of EC$25 on savings account. Senior citizens will pay EC$12.50 a month and person under the age of 17 will not be charged.
“Twenty-five dollar out of my money is way too much,” one woman who was among scores of persons queued up outside a packed RBTT Bank in Kingstown at 8:07 a.m. Monday told iWitness News.
“Let’s say I have a hundred dollars or a thousand dollars in my account, what do you think would happen? I would end up with nothing,” the woman said.
A man who spoke to iWitness News said he had travelled from Bequia to Kingstown because of the charges.
“I ain’t got much money here but I am here to take out my little penny from here,” he said.
In its statement, the ECCB said commercial banks operating within the ECCU are encouraged to explain to their customers and the public at large, their rationale for the increases in fees and charges.
“The ECCB encourages customers to remain calm, carefully consider their banking options and determine what services best meet their needs at this time,” the ECCB said.
Owners of RBTT Bank, RBC Royal Bank said in a statement on that it is “aware of concerns expressed by some of its clients regarding the recent announcement of changes to its suite of Personal Banking accounts.
“We continue to communicate with our clients regarding these changes, to address their questions and assure them of our continued commitment to serving them, and to thank them for their business with us.”
RBC Royal Bank said that as a responsible financial services company with more than 100 years of service in the region, and as part of one of the world’s largest banks, the Bank is working to deliver value to our clients, shareholders and key stakeholders.
“In a recent review of its products and services, RBC Royal Bank recognised opportunities to improve upon its existing deposit product offering to clients in the Eastern Caribbean, while ensuring that the suite provided value for customers based on their lifestyle, banking needs and financial goals,” the statement said.
It said the changes announced include the establishment of new age-based accounts tailored to encourage savings among young people, as well as to continue to provide a differentiated service to our seniors.
The ECCB statement noted that the issue of bank fees and charges has been discussed by the Monetary Council, the highest decision-making body of the ECCB.
The Monetary Council comprises the eight Ministers of Finance in the ECCB member countries.
At its 83rd meeting held on Nov. 6 2015, the Monetary Council approved several recommendations related to bank fees and charges, including establishing an Office of the Ombudsman for Financial Services to mediate on behalf of customers with complaints and address other dispute resolution matters.
The Monetary Council also approved the establishing of a Working Group to review commercial banks’ fees and charges and to report its findings and recommendations to the Monetary Council.
This review will include the compilation of data from the ECCU and other jurisdictions within CARICOM.
The third recommendation was encouraging the ECCU Bankers Association to use moral suasion to establish a defined range of fees for various products and services that would be published for public information.