The Tribune

By EARYEL BOWLEG

Tribune Staff Reporter

ebowleg@tribunemedia.net

CENTRAL Bank governor John Rolle said one solution to high bank fees is to require banks to offer a basic banking account with regulated costs.

His comments were made during a press conference regarding bond offerings at the Central Bank yesterday.

“In The Bahamas, we see that one of the solutions would be that we have a basic banking product,” he told reporters. “A basic banking product would be an account that individuals have access to where there is more regulated control around the cost of that facility. It would be a way of providing some pricing parameters within a defined range for what we call a basic banking or a transactional account.”

Mr Rolle pointed out that similar products are already available in Europe and some Caribbean countries, and local officials are exploring ways to implement them here.

For example, in 2015, the United Kingdom passed regulations requiring the nine largest personal current account providers to offer basic bank accounts. These accounts must be fee-free for standard transactions and cannot include an overdraft facility.

Mr Rolle’s comments come as politicians turn their attention to the issue of rising banking fees, which has frustrated many residents.

Foreign Affairs Minister Fred Mitchell has repeatedly called on the Central Bank to take a tougher stance on regulating fees, while Free National Movement leader Michael Pintard has proposed a plan he claims will address the problem.

“We’re very qualified to provide advice on these matters, and we’ve been doing that,” Mr Rolle said in response to Mr Mitchell’s suggestion that the government may need to step in. “But again, I don’t want the public to believe on any level that you can address some of the issues while not dealing with the other issues.”

He continued: “The approach here is to recognise that you have to improve the consumer experience while also addressing national concerns about the supply of financial services. Supply means there are costs and resources involved that still need to be covered.”

“So, that’s the tension we have to resolve. We cannot avoid that tension, but it doesn’t mean we’re insensitive to concerns. The conversation we’re having with the industry is about improving that experience.”

In response to Mr Mitchell’s reference to the Central Bank of Barbados’ success in managing banking fees, Mr Rolle cautioned that each country must tailor its approach based on its unique circumstances.

Last month, Prime Minister Philip “Brave” Davis announced plans to meet with regulators to seek a balanced approach and “neutralise any conflicts” regarding commercial bank fees.

Mr Rolle added: “While we focus on improving transparency and fee-setting practices, it’s equally important to create an environment where financial institutions can operate more efficiently. We also want to encourage a shift back to their traditional source of income — lending and credit services.”