News Feed

October 22, 2016 - ‘Suspicious’ Four years after fire destroyed the ... +++ October 21, 2016 - Warrens win thriller over Dover Warrens Sports Club Seniors registe ... +++ October 21, 2016 - Neymar staying at Barcelona Barcelona today confirmed that Neym ... +++ October 21, 2016 - Tudor hospitalized Former Cabinet Minister and Member ... +++ October 21, 2016 - Three chasing racing honours Tensions are high with just under a ... +++ October 21, 2016 - Meakins fifth best in the world Former Barbados squash champion Kar ... +++

No immediate hike in bank fees

Customers at commercial banks need not worry for now about any increased fees, although banking institutions are being forced to pay more by way of a recent hike in Bank Asset Tax.

President of the Barbados Bankers Association David Noel told Barbados TODAY that, so far, no bank had indicated it would be passing on the 0.15 per cent increase, despite it being an additional operational cost.

David Noel

David Noel

Minister of Finance announced last month, in his presentation of the 2016 Financial Statement and Budgetary Proposals, that the Bank Asset Tax had moved from 0.2 per cent to 0.35 per cent, retroactive to April 2016.

“Obviously there is a cost impact . . . but I haven’t heard any suggestions of fee increases or any cost increases as a direct result of that. So we wait to see,” said Noel, adding that the tax rise would not impact the banks’ ability to continue to lend.

“I think all banks have been trying to become more efficient, have been trying to find ways to get more customers, have been trying to find ways to woo customers in. Again, we have seen significant reduction in [interest] rates so I don’t see any specific direct impact that this asset tax will have on fees or costs that are going to be paid by the customer,” Noel stressed.

When the tax increase was announced, the banker had expressed concern that it had not been shared “equitably across the entire financial sector”.

Last year, credit unions were required to pay the 0.2 tax on their total assets. That ended this year.

The increase in the Bank Asset Tax is projected to rake in $33.3 million in revenue in a full financial year.

Noel said while the tax had not been applied to other financial institutions, banks were “ready to move forward” and had started their calculations and were ready and willing to make their payments whenever they became due.

As far as interest rates are concerned, Noel said he did not expect much change in those on deposits, mortgages and loans.

In April last year, the Central Bank of Barbados stopped stipulating a minimum interest rate on savings at commercial banks, leaving the financial institutions to determine their own rates as they did for all other interest rates.

“It is really purely market driven,” Noel said. “There is a lot of competition in the market place, so each bank will do what it thinks is in its best interest.”

Meantime, the banker indicated that once the level of loan delinquency falls, consumers should expect more “aggressive” lending from banks and better lending rates.

“Over ten per cent of our loans customers are either behind by about three months, or have totally defaulted,” he said.

However, Noel said, the situation did not leave banks unable to give further loans.

“We have seen in other economies where, as delinquency gets out of control, you have banks themselves being unable to lend because they are unable to survive. We are not at that stage. We have a healthy, robust banking sector. We have significant excess cash liquidity that is there to lend when the economy improves or when there are projects that are viable. But we are going to be cautious; we are not going to lend to someone who we don’t believe has the ability to repay their loan,” he explained.

According to the Central Bank’s 2015 Financial Stability Report, commercial banks remain the dominant player in the financial services sector with 60 per cent of total assets.

5 Responses to No immediate hike in bank fees

  1. Angus Benn
    Angus Benn September 17, 2016 at 6:13 am

    Every one should withdraw there money like the people in St Vincent,when they increase the rate. when you all carry up the rate.Most Bajan black people don’t don’t know how much power they have.They think that they need the Bank.No the Bank need us. Without the customers their is no business.A lot of them don’t understand that.

  2. harry turnover September 17, 2016 at 6:48 am

    Wherever you turn at some stage you have to use the services of a bank… black or white.

  3. Rawle Spooner
    Rawle Spooner September 17, 2016 at 6:57 am

    Make no mistake these greedy banks just waiting for when public not focus on them to raise fees don’t celebrate folks it’s not if but when.

  4. Hal Austin September 17, 2016 at 9:41 am

    The banks are operating like gangsters. |But their greatest fear is a run – if all savers go to withdraw their money the banks will not be able to pay out. It will suffer a bank run – ie Northern Rock and any Argentinian bank. Banks just do not have the liquidity due to their flawed accounting procedures.
    Don’t let foreign-owned banks treat us like fools.

  5. Alex Alleyne September 17, 2016 at 11:27 am

    Banks and Insurance Companies continue to rape the citizens of the World.
    Soon both of them will take BAJANS to the cleaners while having an ear to ear smile.


Leave a Reply

Your email address will not be published. Required fields are marked *