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CARICOM has eyes on banking fees

Financial institutions and other service providers here can expect increased pressure within the next year on issues relating to pricing and competition, this time from a Caribbean Community (CARICOM) working group.

Senior economist with the CARICOM Competition Commission Barry Headley said a group was being established to identify and address issues of concern to consumers in the region.

Headley singled out the financial services sector as one area of contention for many residents in the region, especially when it came to fees.

“Definitely financial services is, both for competition and also from consumer perspective, one of those key areas that people are very concerned about, especially when it comes to the fees and charges for the services.

“That is definitely something that over the next year to year-and-a-half we are going to be encouraging all the member states to provide an idea of what is happening and try to bring that all into one place then probably speak to some of the sector regulators,” Headley said in an address at a one-day sensitization workshop on Competition Law and Policy in CARIFORUM at the Savannah Hotel Monday morning.

The Eastern Caribbean Central Bank recently expressed concern about an increase in commercial banks’ fees across the sub-regional grouping, the Organization of Eastern Caribbean States, and the effects on depositors.

This came after scores of Vincentians withdrew their deposits from RBTT Bank in direct response to the bank’s announcement that it would introduce an EC$25 (BDS $18.52) monthly charge.

Headley made reference to that issue as an example of the concerns being raised by Caribbean nationals.

“I have been to a couple of other countries and the charges by financial institutions is a big problem for some people. One country I was in they said they literally walked up to the door one morning and there was a sign on the door saying from now on you will be charged $25 a month because your bank account is below a certain amount.

“So yes, financial services is on of those, not so much for the fact that they can offer us all these various facilities, but the fact that the charges we have no idea how they come about,” he added.

During the session, which was designed for regulators, policymakers and individuals involved in the area of competition law and policy, participants also cited industries they believed could do with more competition in Barbados including medical, telecommunications, financial and electricity.

Participants also agreed that Barbados was in need of a more robust consumer organization.

Headley said the working group could be more efficient in giving individual groups the support they needed when it came to addressing consumer concerns.

He said the group was also expected to meet with regional politicians by the end of March next year to discuss the issue of competition.

“We don’t want to see competition as just a law, but again how do you frame your policy, what are the policy outcomes that you are trying to achieve? Can you do them in such a way that yes, you protect the sectors that you have to, but you do it in the least negative way for competition and for consumers?”

During the session participants also discussed topics relating to the importance of regulatory agencies, mergers and acquisitions, dominance and trade agreements.

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