Limited powers on bank fees

“ The issue of moral suasion is one that we take very seriously,” the Governor said.

Responding to St Augustine MP Prakash Ramadhar’s questions about the spread between interest on deposits and the interest charged on loans, Hilaire said, “The competitive nature determines the interest rate on loans as well as deposits.” He said the Bank took the novel approach last September to begin publishing the fees and charges of all commercial banks on its website. Observing that only a minority of central banks across the world do this and even then the information is limited, Hilaire said the fees and charges posted on the Bank’s website are very detailed and have internet links.

“This is where we think it is important for consumers to know what is happening, so they can make their own decisions,” Hilaire stated Mitchell, who is also San Fernando East MP, interjected that it was not easy for persons to switch banks. Referring to complaints raised by his constituents, Mitchell said persons can no longer open a bank account using a job letter, two pieces of identification and $100. “Many think that these commercial banks are an oligopoly and they go about their business with concerted practices and they are really anti-competitive,” he stated. Mitchell added that many vulnerable persons in society are “sitting ducks” in this situation.

Ramadhar agreed, as he inquired as to whether basic amenities were available at commercial banks for the elderly. Agriculture Minister Clarence Rambharat said he does not own a credit card and like a close relative of his, is a walk-in bank customer.

Rambharat suggested commercial banks offer a suite of services to customers which are free of charge. He also expressed concern that TT was becoming a society where cash transactions were being frowned upon.

“Should banks be looking at fees as a reflection of the cost of providing a particular service or should banks be looking at fees as income generators?” Rambharat asked.

Saying that fees are driven by market forces, Hilaire indicated that in terms of deposits, global interest rates have trended down and rates in commercial banks are consistent with that.

“Interest rates on advances are also determined by competitive forces,”the Governor stated.

He also said while consumer loans have stayed relatively flat,”one of the rates that have been very high are rates on credit cards.” Hilaire explained that credit card debt is very seductive and it was a trap that many credit card holders fall into. Hilaire added that counterfeit money does not influence bank fees. In response to a question from Independent Senator Sophia Chote SC, Hilaire said the Bank will look into a particular entity called Money Tree.