The Tribune

By NEIL HARTNELL

Tribune Business Editor

BAHAMIAN businesses were yesterday said to be "gravely concerned" about increased banking costs after CIBC FirstCaribbean International Bank (Bahamas) became the latest institution to charge a fee for handling large deposits, a move some banks say is intended to encourage greater security.

Marie Rodland-Allen, CIBC FirstCaribbean's managing director, confirmed in an e-mailed reply to Tribune Business's inquiries that the BISX-listed institution had joined Royal Bank of Canada in implementing a fee to process large cash deposits.

She said: "The cost of processing cash deposits has increased continually over time, and yes, the bank has reviewed its cost structure and made some changes which includes a fee applied to large cash deposits."

This move has not gone down well with some Bahamian companies that are CIBC FirstCaribbean banking clients, who are viewing it as an unnecessary imposition and further increase in the cost of doing business, with the bank seeking to compensate for losses on its credit portfolio.

One irate Bahamian businessman, in an e-mail obtained by Tribune Business, wrote: "I was informed by CIBC First Caribbean that they are charging customers to process large cash deposits.

"Their excuse was that the Central Bank is charging them to take money and hold it for them. Is this a new charge that all banks are implementing? It seems ridiculous to have a bank charge you to take your money.

"If there is that much money in circulation, I would suggest they give out lower interest loans and generate revenue that way rather than charging customers to make a deposit."

Chester Cooper, the Bahamas Chamber of Commerce and Employers Confederation's (BCCEC) chairman, yesterday declined to comment on the situation when contacted by Tribune Business, saying the organisation was "in dialogue with the Clearing Banks Association's (CBA) on a few matters that impact the business community", and he did not want to jeopardise this.

However, Tribune Business sources said the private sector, and many BCCEC members, were "gravely concerned" about the levying of charges such as those imposed by CIBC FirstCaribbean. It will particularly impact businesses dealing with large daily volumes of cash, such as numbers houses, gas stations and a variety of retailers.

Anwer Sunerji, current CBA chairman, told this newspaper that large deposit processing fees were not applied by all Bahamian commercial banks, adding that the sector was not "not looking to charge customers for everything we can find".

He said: "It's not true of the banking industry as a whole. It may be the odd bank charging that levy, but it's not prevalent and we're not all doing it.

"We're very mindful of the fact that costs are going up, and as a general position we're trying to hold costs and not charge customers for every levy we can find. What you find is it's not prevalent; it's not true in the industry as a whole."

A Royal Bank of Canada spokeswoman, meanwhile, confirmed that the bank had introduced a 1 per cent fee for processing cash deposits of $10,000 or more in January 2011, but said this was designed to drive business customers towards more secure methods for depositing their cash.

The spokeswoman explained that it was intended to drive Bahamian businesses to use the bank's day/night drop box depository, which incurred a minimal annual fee.

"It's not a money making scheme for us," the Royal Bank spokeswoman said. "The safety was the biggest part of it. You're going to see that coming out with all the banks.

"Safety and security are of the utmost importance, and we're saying to customers that have large amounts of cash to use the day and night security depository. It's the safest and best way."

In a statement, Royal Bank added: "This charge does not impact routine personal clients coming into the bank to do business. This charge is for large deposits only and primarily impacts business clients who deposit large sums of cash over the counter.

"The over the counter fee for large cash deposits is becoming an industry standard. There is a fair amount of security risk to the client and bank in handling large cash deposits over the counter. We have provided other alternatives for our clients to deposit large amounts of cash."