GEISHA KOW­LESSAR-ALON­ZO

Se­nior Re­porter

geisha.kow­lessar

@guardian.co.tt

The rapid rise and fall of Re­pub­lic Bank Ltd’s (RBL) pro­posed fee in­creas­es has thrust the coun­try’s bank­ing sec­tor in­to the spot­light, high­light­ing the ten­sion be­tween cor­po­rate costs and con­sumer pro­tec­tion.

Econ­o­mist Dr Ronald Ramkissoon said the in­ci­dent re­flects deep­er struc­tur­al chal­lenges af­fect­ing busi­ness­es across T&T.

Ear­li­er this month, RBL in­formed cus­tomers of ad­just­ments to a range of ser­vice fees, spark­ing con­cern among ac­count hold­ers al­ready grap­pling with high­er liv­ing costs.

With­in a week, the bank an­nounced it would pause the fee in­creas­es, cit­ing on­go­ing dis­cus­sions.

On Fri­day, the Cen­tral Bank clar­i­fied that its own in­ter­ven­tion in the mat­ter was min­i­mal, as­sert­ing that its in­volve­ment re­mained con­sis­tent with its man­date to work along­side the bank­ing sec­tor rather than through heavy-hand­ed over­sight.

Speak­ing on the is­sue in an in­ter­view with Guardian Me­dia, Ramkissoon said the pause was an ap­pro­pri­ate out­come and praised the de­ci­sion to in­volve the Cen­tral Bank as reg­u­la­tor.

“They (RBL) have in­di­cat­ed there’s a pause, and I think the Min­is­ter of Fi­nance has done the cor­rect thing in let­ting the reg­u­la­tor take a look at what is hap­pen­ing,” he said, adding, “It is the prop­er way to deal with it.”

Re­pub­lic Bank, one of the coun­try’s largest com­mer­cial lenders, had jus­ti­fied the pro­posed ad­just­ments by point­ing to ris­ing op­er­a­tional costs.

While the bank has not dis­closed pre­cise fig­ures, it not­ed that banks are fac­ing in­creased spend­ing re­lat­ed to cy­ber­se­cu­ri­ty, fraud pre­ven­tion, com­pli­ance re­quire­ments, and tech­nol­o­gy up­grades as fi­nan­cial crime grows more so­phis­ti­cat­ed.

Ramkissoon ac­knowl­edged those pres­sures, ar­gu­ing that the con­ver­sa­tion should not ig­nore the broad­er eco­nom­ic en­vi­ron­ment.

“Costs of do­ing busi­ness are ris­ing. The costs are ris­ing for all kinds of rea­sons, many of them over which busi­ness­es do not have con­trol. In deal­ing with fraud, in deal­ing with cy­ber­crime, in deal­ing with all that is hap­pen­ing, costs are ris­ing.

“The tax­a­tion of the busi­ness com­mu­ni­ty is, in fact, com­ing at a time when the pre­vi­ous ad­min­is­tra­tion would have heard that the ease of do­ing busi­ness is not easy. It is dif­fi­cult do­ing busi­ness. There are all kinds of bu­reau­crat­ic things in place,” he fur­ther ex­plained.

Ac­cord­ing to Ramkissoon, high­er tax­es and com­pli­ance costs in­evitably feed in­to pric­ing de­ci­sions in a mar­ket econ­o­my.

In a news­pa­per ad­ver­tise­ment on Fri­day, RBL stat­ed it was paus­ing its in­crease in fees, which was in­tro­duced on May 1.

RBL said it would share the new im­ple­men­ta­tion dates with the pub­lic soon.

The bank al­so clar­i­fied that the $1.30 charge for with­draw­al would ap­ply on­ly to in-branch teller trans­ac­tions and that there would be no fee in­creas­es at ATMs, on­line or mo­bile trans­ac­tions or pay­ing with the bank’s deb­it card.

The bank added the fees gen­er­al­ly ap­plied to ser­vices on old­er sys­tems, which are ex­pen­sive to main­tain.