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Supernormal bank profits
Describing bank fees for simple things like closing an account, depositing cheques and even an empty envelope in an ATM machine as “supernormal”, Government Senator Michael Coppin yesterday called on First Citizens CEO Karen Darbasie and Republic Bank managing director, Nigel Baptiste, to provide answers.
Darbasie and Baptiste and other bank officials were before a Joint Select Committee of Parliament (JSC) appointed to inquire into finance and legal affairs.
Coppin, JSC vice-chairman, seemed particularly concerned about high bank fees, saying the First Citizens charges were “supernormal”.
He asked Darbasie to explain why someone had to pay fees if they wanted to close an account within three months after opening it.
Darbasie said the issue was not about the closing of the account but the “fairly extensive due diligence” the bank had to do when the account was being opened.
“The charges are meant to recover the costs relating to the opening of the account,” she said.
Fees had to be paid to deposit a cheque to be cashed a few days after to cover “storage costs for keeping the cheque”, Darbasie said. She said the bank had to find space to store a lot of cheques.
Coppin wanted to know why a customer had to pay $25 for a statement of his account.
Darbasie said account statements could be downloaded free of charge online but if you wanted a printed copy, you had to pay $25 and this was to cover paper and mail out costs.
Coppin complained if you deposited an empty envelope into an ATM machone, you had to pay $30.
Darbasie said if the bank gets an empty envelope, workers have to do an audit of the full batch of envelopes deposited in the machine to ensure a slip did not fall out from the empty envelope.
Coppin said customers are made to pay an “ATM maintenance fee” but Darbasie said she was not aware of that.
She said to withdraw money from your First Citizens account at an ATM you pay 85 cents.
If you withdraw money by the teller, you have to pay the bank $5.
Darbasie said there has been no review of the bank’s fee structure since January 2015.
JSC member, Francis Lovell, Moruga/Tableland MP, was concerned about the low interest rates on money deposited in the bank.
“It seems remarkably unfair when I open an account that my two cents are going nowhere and your two cents are expanding.”
Republic Bank’s Baptiste, said interest paid on deposits depends on the overall liquidity of the country.
“Liquidity has been such that it did not support maintaining interest rates as of six, seven years ago.”
Coppin was also concerned about the lack of washroom facilities at banks for customers and special provisions for the elderly and physically challenged.
The JSC heard from the officials present that bank buildings have been around for a long time and it was difficult to install washroom facilities in existing infrastructure.
New branches and those scheduled for renovation will be equipped with these facilities, it was promised.
Across the banking sector, any customer who wants to use the washroom has to go up to the counter and inform a teller and will be taken inside the branch to use staff facilities.