By NATARIO McKENZIE
Tribune Business Reporter
THE Clearing Banks Association's (CBA) chairman yesterday said "smarter banking" by consumers, rather than "across the board" reductions, have driven recent bank fee declines.
Gowon Bowe's comments came following numerous complaints from Bahamians over what they perceived as exorbitant banking fees, resulting in the six commercial banks and Central Bank starting discussions on the matter last October with Dion Foulkes, minister of labour, who oversees the Government's consumer affairs division.
The CHA chairman told Tribune Business: "What we have been going through is what I'm going to call an 'education on all sides'. It was really a greater articulation of where we are coming from; the appreciation that all financial institutions are businesses that can choose their fees and billing practices based on their business models, as well as what services they want to promote and what services they want to retract.
"Primarily, the initial purpose of the meetings was around the cost of banking for the average consumer. I don't want there to be false expectations around government imposing or trying to set or alter the financial institution's ability to make their own decisions regarding services and fees they charge. It's a free market, but this was certainly an avenue to express concerns and try to find solutions."
Mr Bowe added: "It would be inaccurate to say there are fee reductions. What was articulated on Monday was that, for the most part, what you are seeing is the overall fee revenue has declined - but largely because customers have been better educated on how to bank smarter and take advantage of online services, and avoid fees associated with some of the manual services."
He said Bahamas-based commercial banks have committed to publishing their fees for various services, which has led some consumers to shift from one institution another. "There has been greater publication of fee rates of the various institutions," Mr Bowe said.
"Some of that may have led to customers going to other institutions that may have cheaper fees for the services they want. Ultimately you will find some of the banks may have changed their fees because there is a low demand."
Mr Foulkes said yesterday: "We started talks with the Clearing Banks Association last October, and had a meeting with them in November and a meeting with them again on Monday. I'm very pleased to announce that some of the banks have reduced their administrative fees for their various services.
"All of the banks have embarked upon an educational programme with respect to their services. Additionally, the Central Bank and the Clearing Banks Association has agreed to embark on a listing of all of the banks' fees, or at the minimum the main fees that the banks charge.
"Just like the gas stations do, when you open the business sections of the dailies you will see the various prices per gallon of gas, we intend to do the same thing with the clearing banks so the consumers can know exactly which bank is charging which fees so to know which bank to do business with. We are very pleased the Central Bank has embarked on a literacy programme called 'Get Money Smart Bahamas'."
Mr Foulkes urged consumers to shop around for the right banking institution. "I would encourage consumers to go in and talk to their banks, make comparisons and make a judgement call on which which bank you wish to do business with," he added.
"At the end of the day the consumer has to be smart and examine each bank. Each one has different fees and schedules for their services. You're not married to a particular bank, and if you are, get a divorce. Go to the bank that offers you the best possible arrangement."