Increase in bank fees over the past six years
Guardian Business Reporter
Published: Jan 09, 2017
A study has revealed that over the past six years, banks in The Bahamas have raised their fees on a significant number of services and have even added new fees on existing facilities.
The information, which comes amid consumer complaints regarding certain banking fees, was provided in The Central Bank of The Bahamas' (CBOB) semi-annual survey of retail bank charges, administered in June 2016.
Currently, The Bahamas has seven commercial banks. The regulator pointed out that fees on products and services offered by commercial banks are the second most important source of revenue after interest earnings.
CBOB said: “The findings of this survey showed some variation among institutions in the value of fees charged for the majority of banks’ products and services in The Bahamas; however, there are many similarities in the fee structures.”
The report included findings on deposits and related facilities, electronic banking and automated teller machines (ATMs), credit facilities and other banking facilities and services.
The survey, among other things, showed that there has been an increase in annual credit card fees and monthly fees for personal checking accounts.
“The survey revealed that all seven banks extended credit card facilities to customers, inclusive of standard cards under the Visa and MasterCard brand names, with mixed fee movements over the review period.
“The annual fee charged for the standard credit cards increased by 1.18 percent to $44.91, while fees on premium credit cards (business and specialty cards) fell by 9.57 percent to $92.35.
“In terms of personal checking accounts, the mean minimum monthly fee assessed rose modestly by 5.42 percent to $10.54 when compared to the December 2015 survey and the average per check cashing fee firmed by 43.26 percent to $1.69,” the report stated.
The Central Bank said there were “few instances” where fees decreased, “particularly for those which are considered high volume services”.
On the solution front, the regulator mentioned its intent to pursue “strengthening practices and codes on financial literacy and consumer financial protection”.
Meanwhile CBOB said, “It is, however, believed that a direct response through price controls would introduce adverse distortions in the sector.”
The regulator continued: “Realization of the domestic credit bureau will also have benefits for improved lending decisions that reduce banks’ exposure to losses from loan defaults, and permit more transparent and tailored setting of charges on credit facilities according to the risk posed by each customer.
“Continued progress on payment systems’ reforms is also a priority to provide more residents with lower cost electronic alternatives to check writing/cashing and cash withdrawals. Recommended intervention to address other structural constraints which impact costs, will also remain high on the Central Bank’s work agenda.”