Shaw: Bank fees will rise if regulated
Finance Minster Audley Shaw has announced that the Government will focus on increasing competition among banks, as opposed to regulating banking fees, in a "time-bound action plan to stop predatory charges and fees by financial institutions".
Shaw, in opening the 2018-19 Budget Debate yesterday stated: "When you regulate one set of fees, the banks will simply increase another set of fees. You will be running behind them, trying to catch up with regulation." He added that the banks would "simply change the name of the fee, and we will have to come back to Parliament with more regulation to regulate the new fees".
Jamaicans are set to have more banking options as the Bank of Jamaica (BOJ) has approved two new commercial licences, according to Shaw. The increase is to be complemented by a hassle-free framework, being crafted by the BOJ, that will allow customers to switch banks without red tape.
Shaw noted, "It is not beyond us to envision bank customers being able to sign a single form (paper or electronic) authorising the new bank of their choice to execute the related processing work on your behalf without the need to repeat the know-your-customer process."
Last month, the Banking Services Bill, piloted by Opposition Member Fitz Jackson, was rejected in the Lower House. It sought to have the BOJ modulate bank fees in an effort to protect customers. After the bill was dumped, Jackson stated that it would be tabled in the next legislative year.
Shaw also chided the Opposition for failing to act while in power: "There are some vocal critics against bank fees today who had the opportunity to take action in the past. When they were in the position to pass legislation, they failed to address this banking issue."