MINISTER of Industry, Investment and Commerce, Karl Samuda says the Government will continue to press banks to reduce unfair and exorbitant service fees, and that the Consumer Affairs Commission (CAC) will expose such practices wherever they are found.

Speaking at a press conference at his ministry’s New Kingston offices yesterday, Samuda said the government was not just paying lip service, and that within three weeks, following discussions with Minister of Finance Audley Shaw, a submission would be made to Cabinet to “put some teeth” into the recommendations of the Fair Trading Commission (FTC), and the CAC.

Presenting the findings of the FTC on the nature and extent of competition in the commercial banking sector, Samuda noted that the Commission had mainly focused on ancillary services, to asses whether any bank or group of banks could be hindering competition.

Samuda disclosed that the study had found that revenues earned through fees and commissions for services provided were “considerably” greater than the reported cost of providing such services.

“This suggests that there is significant room to lower fees and still cover attendant expenses. Simply put, fees are excessive, in relation to charges,” he said.

Samuda noted that the country’s two largest banks, National Commercial Bank (NCB) and Bank of Nova Scotia (BNS) accounted for some 73 per cent of the sector’s gross revenue. “That’s almost together, clearly a monopoly,” he said.

The commerce minister said that according to the findings, NCB and BNS have consistently maintained a large share of the market, despite charging the highest fees. He pointed out that because of this large market share and consumers being largely uninformed, as well as other factors, the smaller banks were unable to make an impact in the market.

“The two are so powerful that no matter what the smaller banks do, they cannot dent the impact that the larger banks have, and the extent to which they can retain high charges without, in any way, feeling the elements of competition,” Minister Samuda outlined.

The sector has seven banks, which account for over 75 per cent of the deposits held by deposit-taking institutions, with interest charges being their main source of earning. These charges account for 60 per cent of their net revenues. Banking giants, NCB and BNS operate 85 of the 130 branches of banks in the island, the report noted.

Of branch market share, NCB accounts for 45 branches, BNS 40, Royal Bank of Trinidad and Tobago (RBTT) 20, and First Caribbean International Bank, 13. First Global Bank, Pan Caribbean Bank, and CBNA account for the rest of the total with six, five, and one, respectively.

The study examined the fees related to transactions such as: credit and debit card usage, bill payment, wire transfer, standing orders, chequing accounts, managers’ cheques, bill payment, minimum balance violation, in-branch withdrawals, cash deposits and dormant accounts.

Samuda pointed out that the aim of the report was to “make the banks aware that we are not simply going to be talking about the problem, but we are going to be analysing their operations”.

“We are going to create an information pool for the consumers. We feel that this is vital,” the minister emphasised.