NASSAU, Bahamas, CMC—Prime Minister Phillip Davis will meet with stakeholders in the banking industry “in the coming days or the coming weeks” amid concerns that Parliament may be asked to intervene to address the increasing fees and services of commercial banks in the Bahamas.
Acting Press Secretary Keishla Adderley told reporters that Prime Minister Davis, who is still recuperating from back surgery, will seek to determine a “happy medium” on the need for reform in the commercial banking sector.
“The prime minister has noted with interest the very vigorous debate that’s been raging concerning banking fees and whether or not they are justified,” she told reporters, adding, “on the one hand, there is the retail banking sector, which is continuing to make a case for preserving free enterprise and ensuring that competition is maintained, on the other hand, of course, there are consumers who are questioning whether these fees are justified.
“Now, the prime minister plans in the coming days or the coming weeks, sometime very soon, to sit down with both sides, sit down with regulators to get a sense of where things stand and to try to come to a happy medium,” she added.
Last week, Foreign Affairs Minister Fred Mitchell warned that if the Central Bank does not intervene more aggressively, as it has in Barbados, then perhaps the legislature will have to intervene.
Mitchell said the “ service to the Bahamian public will not improve if the banks don’t get it.
“They keep forcing us to swallow digitalization when the internet doesn’t work here. The services are second rate at the banks, charging you to keep your money,” he said.
However, Gowon Bowe, chairman of the Clearing Banks Association (CBA), has warned that regulating bank fees and services could lead to the country becoming a “communist state” and going down a “very slippery slope.”
“When we get into this debate about mandating, regulating, or legislating the value of services for private enterprise, we are moving towards a communist state. We are saying that the government is a free market enterprise, and we have to be very careful because that’s a very slippery slope,” Bowe said.
But Mitchell remains adamant that describing Bowe’s comments as unhelpful and inaccurate “hyperbole.
“The only slippery slope I think it would lead to, in my opinion, is better service. Hyperbole is sometimes useful, but in my view, not in this instance.”
In January, the Central Bank of Barbados mandated no fees for electronic transactions, including Automated Clearing House (ACH) and real-time payments (RTP) transfers.
It also called on all commercial banks to offer at least one savings account that is free from fees or charges.
The leader of the main opposition Free National Movement (FNM), Michael Pintard, said that should his party win the next general election, the financial environment would be reformed to “improve the domestic banking sector.”
Pintard also promises that the party will “revise the banking framework to create a sector that is both inclusive and cost-efficient, ensuring banks remain viable while truly serving Bahamians.”
He said this would include increasing the Central Bank’s regulatory remit to assess the validity of banking fees, ensuring that fees are transparent and fair and not simply junk fees with no justification, and tasking the Central Bank with streamlining interbank transaction protocols, ensuring they are efficient and cost-effective, using best-in-class technology.
Pintard also accused the Davis administration of “idle talk” and “handwringing” on the issue, pointing out that while Mr. Mitchell has frequently criticized banking problems, the government has not taken meaningful action.
Adderley said that the Central Bank of the Bahamas is the main regulator of commercial banks in the Bahamas, with the government having overall oversight.
“ So, we want to sit down and come to a consensus in the public’s interest and to ensure that business is maintained.
“No one wants the banking sector to hurt, so we want to see how we can come to a happy medium and neutralize any conflicts that may have arisen over this issue,” Adderley told reporters.
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