By Fay Simmons

Tribune Business Reporter

jsimmons@tribunemedia.net

A COST analysis of bank fees has been released by the Central Bank - showing that prices continue to differ, notably for transactions involving deposit account administration and credit service maintenance.

The Cost Analysis on Comparability of Bank Fees report showed the fees at June 2024. The report noted that consumers that conduct transactions using digital channels see a significant reduction in fees when compared to using physical or paper delivery channels.

According to the report, CIBC remained the least expensive commercial bank for student account transactions with Commonwealth Bank Limited, Royal Bank of Canada, and Scotiabank Bahamas Limited following, each matching the cost-free digital outcome, except for stamp taxes, but ranking costlier when clients used physical banking services.

The report noted that due to Commonwealth Bank not issuing ATM cards for student account holders the fees were less than other banks.

CIBC also maintained the lowest fees for retiree savings accounts, both for over-the counter and digital services.

For adult saving products, Bank of The Bahamas (BOB) was the least expensive option, when using digital channels and for physical channels, RBC FINCO was the least expensive for adult chequing accounts.

Fidelity was the least expensive for adult savings accounts using physical banking services, CIBC was the least costly when using fully digital services.

Scotiabank was the priciest option for adult chequing and savings accounts using digital channels, as well as for students and adults with savings accounts that primarily use physical banking.

RBC FINCO and RBC had the highest cost for seniors, with RBC Finco also the highest cost for students using digital banking services.

BOB and CIBC had greater costs for retiree and adult checking accounts that primarily used physical banking.

For fees on late or missed payments, Fidelity Bank maintained the lowest fees for late credit card, car loans and mortgage payments.

Bank of the Bahamas matched their penalty fee for late or missed credit card payments. 

RBC, Scotiabank, and CIBC had the highest charges on late credit card payments an RBC and RBC FINCO were costliest banks for late mortgage payments.

Central Bank said they are reviewing policy reforms to increase digital banking inclusion to improve the “efficiency and affordability” of banking services.

“In addition, customers’ access to and understanding of technology might occasionally diminish the quality of their experience when compared to digital channels,” said Central Bank

“From a policy standpoint, the Central Bank is continuing to review policy reforms to increase digital financial inclusion, as means to improve the efficiency and affordability of access to financial services.

“The Central Bank will continue to consult with stakeholders about the best ways to improve baseline access to transactional services, including through regulation, as well as transparency and disclosure norms for credit facilities management.”

The regulator also said it 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).”