The issue of rising bank fees has been a recent hot topic in the Region, particularly in Jamaica and the Eastern Caribbean Currency Union. Banks in Jamaica, for example NCB and Scotiabank have made record breaking profits while fees have generally increased, sparking heated debates to the fairness of the practice.
CaPRI argues that the increase in fees are due to various factors, such as:
- Declining interest income has pushed banks to increase fees to maintain profit levels;
- Customer demands for increasingly sophisticated financial services and the availability of these services; and
- Higher standard of efficiency, solvency and liquidity of bank.
The research institute also claimed that the data supports the hypothesis that bank fees in the region are not significantly higher than other parts of the world; and warned that arbitrarily attempting to manipulate the market forces dictating fees could force banks to increase their interest income, increasing the cost of borrowing to customers.