Uncompetitive bank fees? Government should act in consumers’ interest
The Jamaica Manufacturers’ Association (JMA) has suggested that fees charged by the island’s financial institutions should be commensurate with the cost of the services being delivered.
At the same time, it said that if the options available are uncompetitive and moral suasion has failed to work, the government should make decisions in the interest of consumers and the development of the country.
Reacting to a Bill currently before Parliament seeking to amend the Banking Services Act to increase customer protection against high fees, the JMA, in a release, said it has been a staunch advocate for competitive interest rates and banking fees to the productive sector.
It said that financial institutions have a critical role to play in unlocking capital to the productive sectors of the economy to stimulate much needed growth.
“It is the view of the JMA that interest rates still need to be lower and that bank charges should be commensurate with the cost of the service being delivered,” the Association said.
The Association noted that there have been varying perspectives from the private sector regarding the Bill which, based on the proposals, provide financial relief to consumers and businesses.
“Further, we acknowledge that the role that a government should play in regulating fees for an industry is debatable,” the release said.
“If in reality the options available to our citizens are uncompetitive in nature and do not allow easy movement of accounts across platforms, and moral suasion has failed to work within a regulated industry, the government should ultimately make decisions in the interest of the consumer and development of the country,” it added.
“We do hope that in the spirit of public-private partnership, the private sector will be engaged and will be motivated to seek unanimous consensus on the particulars of the Bill,” the release said.
According to the Bill, piloted by Opposition Member of Parliament Fitz Jackson, a select committee of the House of Representatives on Economy and Production considered the level of fees charged by financial institutions in Jamaica.
The committee reported that fees charged by deposit-taking institutions on transactions discourage deposits and negatively impact the savings rate of the country.
Among other thing, it also reported that the ratio of income from fees as opposed to income generated from core banking activities is a cause for concern.