JBA says banking fee regulations will ultimately harm consumers
KINGSTON, Jamaica — The Jamaica Bankers Association (JBA) has written to Finance Minister Audley Shaw airing their disapproval of the Banking Services (Amendment) Bill, 2016 which was tabled in the House of Representatives last week.
JBA said in a release today that it advised the minister that though they recognise the need to continuously improve the overall banking experience of customers, the association does not support the proposed Bill in its current form.
The bankers said Member of Parliament Fitz Jackson, who tabled the Bill, was advised of their stance in a meeting yesterday.
Chief among their complaints is that the effective price-fixing, which the Bill’s ‘Mandatory Minimum Service Package’ would introduce, is inconsistent with free market principles, and sends a wrong signal to private sector investors at a time when Jamaica is seeking to attract new local and foreign investors as part of the Government’s aggressive growth agenda.
They also argued that competition is increasing with the addition of at least two new commercial banks expected to begin operations this year, and the banking industry, like any other industry, needs to be able to price services based on operational costs and business objectives.
According to the release, if banks are not able to recover the real cost of providing services from the people utilising the services, “this will be detrimental to the consumers in the long run”. They said banks may try to recover those costs through higher lending rates to consumers and the private sector.
Jackson and Shaw were also reminded that several banking services are offered at alternate channels (on-line, ATM, POS, Mobile) that not only attract low or no fees, but are also widely-distributed and provide greater convenience for customers, JBA said.
Meanwhile, the bankers advocated for the removal of impediments that prevent the ease of mobility between financial institutions, so as to allow the consumer to make a choice between the available options.
The JBA said they will provide detailed feedback on the Bill within two weeks.
