The Caribbean Association of Banks Inc (CAB) as the representative body and recognised voice for banks and other financial institutions in the Caribbean has been closely monitoring the recent developments in Belize related to the implementation of Practice Direction No. 7 of 2023 – Restriction of Fees and Charges in the Domestic Banking Sector (PD7) by the Central Bank of Belize. The concerns expressed by Belizean banks in response to PD7 are profound and warrant careful consideration.
While the CAB fully supports the need for independent and prudential regulation of the banking sector, we wish to overtly express concern regarding the degree of involvement in and influence of the market by the Central Bank of Belize via the regulations outlined in PD7. It is well evidenced that healthy competition within a sector often leads to better pricing, improved services, and a wider range of options for consumers. Therefore, the gross limitations imposed on domestic banks in Belize to competitively engage and respond to changes within market is disquieting.
The CAB is of the opinion that it is not within the purview of the regulator to influence consumer behavior but rather the free operations of the market should prevail. An approach focused on greater transparency and disclosure of fees is therefore encouraged as opposed to price setting wherein banks provide clear and detailed information about their products, services, and the associated costs. In this vein, consumers are empowered to make informed decisions without undue market influence by the regulator.
We wish to state, that though the subject of fees and charges remains a contentious matter not only in Belize but throughout the Caribbean, acknowledgment must be given to the current operating environment wherein banks have to contend with ever increasing costs of compliance, and cybersecurity (as we transition to digital). Banks similar to any other business cannot operate in a manner that would be detrimental to their long-term viability and the related fees and charges for services rendered are in many instances already within the lowest price point. Considering the previous, the reality, simply phrased is that there is a cost to serve.
The position of the CAB on this matter is in keeping with views previously expressed related to a similar circumstance. The Association remains committed to advocating on behalf of the interests of its members and will spare no effort in this regard.