MORE STEEP BANK CHARGES

COMMERCIAL banks, which are recording historic profits, are quietly hefty additional charges on individual and commercial customers.

Banks are now inflicting charges on every single transaction, whether it is over-the-counter, online or at automated teller machines (ATMs).

In addition, commission charges at point-of-sale machines range from 75 cents to $2.25 each, depending on the value of the respective transaction.

Commission charges are a percentage of the value of each “settlement.”

An investigation found that monthly bank charges for a medium-sized company could be at least $3,500.

Rental of point-of-sale machines costs between $300 and $450 a month.

At least one bank has stopped accepting deposits over the counter, with customers being asked to use the ATM or fast deposit boxes inside the building.

Banks permit deposits of cash, cheques or payment stubs up to a maximum of 20 items in each envelope.

It is in the interest of a depositor to have denominations of $100 notes.

Smaller denominations — $20, $10, $5, or $1 – result in higher charges.

Commercial customers with large deposits are mandated to use night deposit bags, which costs $2 each.

There is a night bag processing charge of $35.

These sample charges are in addition to other well-known transaction costs.

Most charges are not publicised, with banks saying that details are provided upon request.

Financial-watchers have advised customers to check their periodic bank statements, whenever those are provided.

 Certain banks have stopped providing such statements.

“Banks are eating away even more at the funds of individual customers, and the profits of commercial clients,” one keen observer said.

Banks have argued that transaction fees help in recouping operating costs.

But the sector earns most of its profits from mortgages, business and personal loans, all of which attract high interest rates.

There have been complaints about the wide gap between the interest rates on loans and the low returns on deposits.

Prime Minister Dr. Keith Rowley has declined to intervene on the matter of the number and value of bank charges.

But a public outcry by Barbados’ Prime Minister Mia Mottley led to a restructuring of charges in that country, guided by the Central Bank.

Republic Bank, Trinidad and Tobago’s largest financial institution, has been reporting higher and higher annual after-tax profits, with an unprecedented $1.75 billion for 2023.

RBC had an after-tax profit of $1.075 for its most recent fiscal year.

First Citizens’ after-tax profit for its latest financial year was $777 million, while Scotiabank’s returns were $678 million.

Other financial institutions, including JMMB and Ansa Merchant Bank, have also been reporting healthy annual returns.

These unparalleled profits are taking place in an economy that is still significantly smaller than it was a decade ago, according to financial experts.

Steep bank charges have been identified as a key factor in the shutdown of many small businesses and in the widening gap between the rich and poor.

Scores of small and medium-sized businesses did not survive the Covid-19 shutdown, at least partly because of stringent charges by their respective banks.

The Central Bank has not sought to redress the high charges, and merely publicises them, in accordance with the Financial Institutions Act.