BANKS have come under heavy criticism from both Prime Minister Andrew Holness and Finance Minister Nigel Clarke on their decision to hike fees and charges, with the latter calling the banks “tone-deaf” to their customers' circumstances and expressing hope that recent dialogue about the matter with deposit-taking institutions will result in some changes.
“When it comes to the setting of bank fees, it would seem as if our commercial banks are tone-deaf. There seems to be a callous disregard for the economic circumstances for the plurality of Jamaicans,” Clarke told the audience at the Jamaica Stock Exchange's (JSE) 17th Regional Investments & Capital Markets Conference on Wednesday.
Clarke questioned the rationale of banks charging customers to use automated teller machines (ATMs) when they introduced the equipment “to graduate customers from inside the banking hall to use digital channels”.
He called on them to be “sensitive”, indicating to participants at the JSE conference that he has “called the banks in”.
“I have spoken to them and I expect them to be responsive,” the finance minister said to applause from attendees.
“Because the type of economic growth that we are after…must be inclusive, an economic growth that everyone sees their interest in…” he added.
Clarke argued, too, that while the increase in bank charges may not affect Jamaicans within certain income brackets, “it is a material amount” for those earning $15,000 per week or less.
“Jamaicans on lower incomes must be made to feel comfortable with using products. They must feel as if their realities are taken into account in the way a bank designs its products and the way a bank prices its products, and they must have confidence that they will be treated equitably and fairly,” Clarke emphasised.
The finance minister also underscored that he understands the capital investment banks make in the digital transformation drive, as well as the costs to be recovered from their daily operations. Notwithstanding, he urged them to “take into account the economic structure and social structure of the country as prices are set, and at the very minimum [ensure that] there are breakpoints for persons on lower incomes and who have lower balances”.
Clarke's sentiments are not dissimilar to those of Prime Minster Andrew Holness who, on Tuesday night during his keynote address at the JSE conference, urged financial institutions to be cognisant of the difficulties Jamaicans are facing, especially during the novel coronavirus pandemic.
Holness reminded that while Jamaica seeks to transition out of the pandemic and the related measures, “we are still in the midst of a pandemic”. In this regard, he noted that there are many Jamaicans experiencing significant financial difficulties and told business leaders present that “it would be iniquitous to increase banking fees and other prices on consumers at this time”.
“Business leaders must pay attention to the social context — I have a higher duty to ensure equity and to protect the vulnerable,” the prime minister stated, adding that he is not appealing to their conscience but, rather, pointing out what makes good business sense.
Their pronouncements are similar to that of Jamaica Labour Party (JLP) General Secretary Richard Creary, who called on the Government to engage banks about the increasing fees.
For his part, St Catherine Southern Member of Parliament (MP) Fitz Jackson, who has long been advocating for something to be done about the fees, stepped up his own lobbying, calling on the Government to act urgently to protect consumers.
“I am heartened by the recent announcement by some officers of the JLP who have now recognised that the public ought to be protected from the wicked bank fees,” Jackson said in a release.
The MP also blasted Jamaica National Bank for charging customers $1,000 to transact business in its banking halls on Saturdays, calling the move “grossly unreasonable”.
Jamaica's two largest commercial banks — National Commercial Bank (NCB) and Scotiabank Jamaica — recently alerted the public to new service charges, with increased and reinstated fees that will take effect between January and March this year.
Among the charges listed for NCB are $30.95 for customers withdrawing from the bank's proprietary ATMs. This service was previously free. NCB customers using non-NCB ATM's will be charged $60, while it will cost $25 to do a balance inquiry in an ATM, and $500 for the use of Visa debit cards at international ATMs.
Scotiabank, on the other hand, will charge its customers, with effect from February 1, $25 to withdraw from its own ATMs and $60 from other banks' machines, with seniors paying a reduced charge of $31. Scotiabank will also charge customers $312 to withdraw from an international ATM.
In an earlier response to Jamaica Observer queries about the fees, NCB Financial Group pointed out that, “The general review of fees was conducted in the normal course of operations and the changes notified to customers, as required. We have reinstated fees that had been temporarily suspended when the pandemic started in early 2020, and we made adjustments to others due to increased costs, including inflation.”
For its part, Scotiabank said its banking fees have been unchanged since 2019 and that it was necessary for the institution to review charges in light of increases in operational costs.