An­drea Perez-Sobers

Se­nior Re­porter

an­drea.perez-sobers@guardian.co.tt

Re­pub­lic Bank Ltd will im­ple­ment a se­ries of fee in­creas­es on se­lect prod­ucts and ser­vices from this Fri­day, May 1, prompt­ing con­cern from busi­ness groups who warn the changes could add pres­sure to al­ready strained en­ter­pris­es.

The bank, in a no­tice post­ed on its web­site, in­di­cat­ed that the ad­just­ments form part of “an on­go­ing re­view of our prod­ucts and ser­vices.” The changes af­fect a wide range of trans­ac­tions, in­clud­ing cheque books, for­eign cur­ren­cy drafts, man­ag­er’s cheques and penal­ty fees tied to in­suf­fi­cient funds and over­drawn ac­counts.

Among the ad­just­ments, the fee for of­fi­cial cheques or man­ag­er’s cheques will in­crease from $20 to $30, while charges for for­eign cur­ren­cy drafts will move from $28.75 to $35.

The cost of cheque books for com­mer­cial cus­tomers will move from $43 to $76 for a 100-leaf book.

Penal­ty-re­lat­ed charges are al­so set to in­crease, with the fee for non-suf­fi­cient funds trans­ac­tions climb­ing from $34.50 to $57.50, and over­drawn ac­count fees ris­ing from $30 to $57.50. Late pay­ment fees on both per­son­al and com­mer­cial loans will al­so be in­creased, with some min­i­mum charges mov­ing as high as $100.

The changes al­so af­fect trans­ac­tion struc­tures for cer­tain ac­counts. Cus­tomers us­ing Op­ti­miz­er and per­son­al in­ter­est chequing ac­counts will no longer ben­e­fit from a set num­ber of free elec­tron­ic deb­its be­fore fees ap­ply, while Sav­ings Plus ac­counts will con­tin­ue to al­low lim­it­ed free with­drawals be­fore charges are in­curred.

The Con­fed­er­a­tion of Re­gion­al Busi­ness Cham­bers (CR­BC) re­spond­ed with con­cern, warn­ing that the tim­ing of the in­creas­es could fur­ther strain small and medi­um-sized en­ter­pris­es (SMEs).
“At a time when small and medi­um-sized en­ter­pris­es are al­ready nav­i­gat­ing high op­er­at­ing costs, lim­it­ed ac­cess to for­eign ex­change, and re­duced con­sumer spend­ing, any ad­di­tion­al fi­nan­cial bur­den is deeply trou­bling,” the or­gan­i­sa­tion not­ed.

The CR­BC added that high­er bank­ing fees will in­evitably in­crease the cost of do­ing busi­ness and could slow eco­nom­ic ac­tiv­i­ty.

“SMEs are the back­bone of our econ­o­my, dri­ving em­ploy­ment, in­no­va­tion, and com­mu­ni­ty sta­bil­i­ty. Mea­sures that in­crease trans­ac­tion costs risk slow­ing eco­nom­ic ac­tiv­i­ty, dis­cour­ag­ing for­mal­i­sa­tion, and weak­en­ing busi­ness sus­tain­abil­i­ty or rather its sur­vival,” the group stat­ed.

Chair­man of the CR­BC, Vivek Char­ran, ques­tioned whether the in­creas­es re­flect the eco­nom­ic re­al­i­ty fac­ing busi­ness­es.

“In­creased bank charges are to­tal­ly out of touch with the chal­leng­ing re­al­i­ty of SMEs. It gives the im­pres­sion that the banks seek to prof­it from busi­ness un­der pres­sure. How are these de­ci­sions ac­tu­al­ly made in the board­room, know­ing the eco­nom­ic re­al­i­ty of the ma­jor­i­ty?” he said.

“This il­lus­trates the larg­er pic­ture of how the bank sees it­self in the eco­nom­ic re­cov­ery and re­vi­tal­i­sa­tion of the econ­o­my and the coun­try. Do they see them­selves as part of the process in a lead­ing and sup­port­ive role? Would not fa­cil­i­tat­ing di­ver­si­fi­ca­tion, im­port sub­sti­tu­tion, and build­ing the non-trad­able sec­tor be in sync with the gov­ern­ment and busi­ness? Why do so many in the busi­ness com­mu­ni­ty feel this is a slap in the face at this time?” he added.
Pres­i­dent of the Ch­agua­nas Cham­ber of Com­merce, Bal­dath Ma­haraj, al­so ex­pressed dis­ap­point­ment, point­ing to the cu­mu­la­tive bur­den fac­ing busi­ness­es.
“The Re­pub­lic Bank fee in­creas­es set for Fri­day were quite dis­ap­point­ing for the busi­ness com­mu­ni­ty, par­tic­u­lar­ly re­gard­ing the sur­vival of small and medi­um en­ter­pris­es,” he said.
“We ful­ly un­der­stand that fi­nan­cial in­sti­tu­tions must re­view pric­ing from time to time, but the tim­ing and size of the in­crease rep­re­sent a sig­nif­i­cant cost for busi­ness­es al­ready strug­gling with ris­ing costs in util­i­ties, freight, and labour. These col­lec­tive pres­sures cre­ate a fi­nan­cial strain that threat­ens the very sta­bil­i­ty of our na­tion’s eco­nom­ic en­gine,” Ma­haraj added.

He warned that busi­ness­es op­er­at­ing on thin mar­gins may pass on the ad­di­tion­al costs to con­sumers.
“Be­cause most busi­ness­es op­er­ate on ra­zor-thin mar­gins, they are of­ten un­able to ab­sorb these costs. Con­se­quent­ly, the av­er­age cit­i­zen will like­ly feel the im­pact as these fees are passed on, dri­ving up in­fla­tion and fur­ther erod­ing lo­cal pur­chas­ing pow­er,” he said.