By FAY SIMMONS

Tribune Business Reporter

jsimmonstribunemedia.net

THE Prime Minister is to meet commercial banks on banking fees, after the issue has been in the spotlight amid rising bank fees.

Press secretary Keishla Adderley announced that Prime Minister Philip Davis will soon meet commercial banks to address concerns.

During the Office of The Prime Minister’s weekly press briefing, Mrs Adderley said Mr Davis is aware of the “vigorous debate” regarding the increase in bank fees and plans to engage with stakeholders.

She elaborated that while commercial banks aim to stay competitive, consumers are questioning the justification for higher fees.

“On the one hand, there is the retail banking sector, which is continuing to make a case for preserving free enterprise and ensuring that competition is maintained,” said Mrs Adderley.

“On the other hand, of course, there are consumers who are questioning whether these fees are justified.”

Mrs Adderley indicated Mr Davis plans to meet with both commercial banks and their regulator, the Central Bank, to seek a “happy medium” that ensures banks remain profitable while protecting consumers from undue financial strain.

“The Prime Minister plans in the coming days or the coming weeks, sometime very soon, to sit down with both sides, sit down with regulators, to get a sense of where things stand, and to try to come to a happy medium,” she said.

She emphasised that the goal of these discussions is not to “hurt” the banking sector but to address conflicts and foster ongoing engagement between banks and the government.

“No one wants the banking sector to hurt so we want to see how we can come to a happy medium and neutralise any conflicts that may have arisen over this issue,” Adderley added.

“This is a continuation of discussions the government has been meeting regularly with banks, particularly to try and engage banks more in their participation in the economy of The Bahamas and to meet the needs of consumers.”

The Central Bank of The Bahamas yesterday released its cost analysis on bank fees and is working on “targeted reforms” to address fee-setting practices.

“The Central Bank is working on a number of fronts to advance targeted reforms on fee setting practices for supervised financial institutions,” said the Central Bank.

“However, the Central Bank is mindful that these interventions must be framed to preserve the soundness of deposit-taking institutions, which is fundamental to the stability and orderly functioning of the economy.”

The regulator said it is exploring reforms that will allow central government to legislate consumer protection and market conduct standards and to grant the Office of the Financial Services Ombudsman statutory independence.

“Aside from interim measures under the remit of the Payment System Act (2012), that could take effect in the first half of 2025, broader reform proposals are also being explored, that would enable the Government to legislate consumer protection and market conduct standards, also applicable to credit products; and which could give the Offices of the Financial Services Ombudsman statutory independence,” the Central Bank noted.

Additionally, the Central Bank is working on measures to improve banking services access in Family Islands by identifying needed infrastructure changes for better cash and digital payment services.

“Where cost is a significant factor, the Central Bank continues to craft reform proposals that would achieve more universal access to the supply of financial services in the less populated parts of The Bahamas,” said the Central Bank.

“This includes identifying where supportive changes are needed in the infrastructure to improve access to both cash and digital payment services, and the role that agency banking could play in lowering supply-side hurdles.”

The regulator also said they are also working on developing financial inclusion regulations for people with lower incomes.

“On affordability and access, within the remit of the Payments System Act (2012), the Bank is developing financial inclusion regulations to mandate a ‘basic’ deposit account product for consumers of low-economic means,” said the Central Bank.

“The targeted approach would be exposed to public consultation and would also be accompanied by proposals to add more transparency to the fee setting process for digital wallets, credit and debit cards, and transactional accounts, which facilitate payments (savings and chequing accounts).”