CBTT: We have no authority to regulate Republic Bank fee hike

PE­TER CHRISTO­PHER

As Re­pub­lic Bank Ltd im­ple­ment­ed an in­crease in fees on Fri­day, the Cen­tral Bank dis­closed it does not reg­u­late com­mer­cial bank charges in T&T di­rect­ly, as its “leg­isla­tive au­thor­i­ty to reg­u­late fees and charges is de­fined by sec­tion 44A(1) of the Cen­tral Bank Act and is lim­it­ed to fix­ing max­i­mum and min­i­mum in­ter­est rates, fees and charges on loans, ad­vances and oth­er cred­it fa­cil­i­ties.”

The Cen­tral Bank re­spond­ed to ques­tions from the Sun­day Busi­ness Guardian, as cus­tomers of Re­pub­lic Bank con­tin­ued to vent on the is­sue on so­cial me­dia.

Sec­tion 44A(1) of the Cen­tral Bank Act “does not ex­tend to gen­er­al ser­vice fees such as de­posit ac­count fees, in-branch trans­ac­tion charges or ATM fees,” said the reg­u­la­tor of fi­nan­cial in­sti­tu­tions,” said the Cen­tral Bank.

It said, more broad­ly, the Bank ex­er­cis­es over­sight of fee-re­lat­ed con­duct through its Mar­ket Con­duct Guide­line, which es­tab­lish­es stan­dards for trans­paren­cy, dis­clo­sure and the fair treat­ment of cus­tomers in con­nec­tion with fees and charges.

Com­mer­cial banks are re­quired to for­mal­ly no­ti­fy the Cen­tral Bank of the in­ten­tion to ad­just their fees. The Bank’s Mar­ket Con­duct Guide­line for in­sti­tu­tions li­censed un­der the Fi­nan­cial In­sti­tu­tions Act (2018) re­quires com­mer­cial banks to dis­close in­for­ma­tion on fees and charges and “to pro­vide cus­tomers with at least 30 days’ writ­ten no­tice of any pro­posed change. Com­mer­cial banks are al­so re­quired to dis­play the no­tice at their of­fices and on their web­site for at least 30 days be­fore the ef­fec­tive date of any in­crease.”

The Bank said it was “in dis­cus­sions with Re­pub­lic Bank on the mat­ter to un­der­stand whether al­ter­na­tive cours­es of ac­tion were ex­plored; their as­sess­ment of the im­pact of the changes on par­tic­u­lar cat­e­gories of cus­tomers, and how and when cus­tomers were no­ti­fied of the changes.”

The Bank al­so could not state if the gov­ern­ment’s im­po­si­tion of in­creased tax­es prompt­ed the in­crease in bank­ing fees, out­lin­ing, “The Cen­tral Bank is not in a po­si­tion to con­firm whether the fee in­creas­es are di­rect­ly at­trib­ut­able to the as­set levy, as com­mer­cial banks face a range of op­er­a­tional costs and busi­ness con­sid­er­a­tions that may in­flu­ence their pric­ing de­ci­sions. The Bank can share at this time that most of Re­pub­lic Bank’s new fees are with­in the range of the ex­ist­ing fees for the oth­er com­mer­cial banks.”

On Face­book on Fri­day, UWI St Au­gus­tine Pro­fes­sor Emer­i­tus econ­o­mist Patrick Wat­son agreed that the gov­ern­ment con­trols the ma­jor­i­ty share­hold­ing in Re­pub­lic Fi­nan­cial Hold­ings Ltd (RFHL), the par­ent com­pa­ny of Re­pub­lic Bank. The Gov­ern­ment owns 32.62 per cent of RFHL di­rect­ly and con­trols the Na­tion­al In­sur­ance Board, which owns 18.81 per cent of the fi­nan­cial hold­ing com­pa­ny.

Wat­son said the gov­ern­ment’s con­trol of RFHL “is re­flect­ed by the com­po­si­tion of the board of di­rec­tors. We may in­ter­pret the cur­rent pol­i­cy of Re­pub­lic as gov­ern­ment pol­i­cy. I am quite sure that it’s not with­in the re­mit of the Cen­tral Bank to de­ter­mine what charges a com­mer­cial bank im­pos­es on its cus­tomers. That pow­er lies with the board of di­rec­tors, ap­point­ed large­ly by the Gov­ern­ment.” Sev­en of RFHL’s 13 di­rec­tors were ap­point­ed by the cur­rent ad­min­is­tra­tion.

Peren­ni­al ir­ri­tant

Bank­ing fees have been a long-stand­ing con­cern for cus­tomers in Trinidad and To­ba­go.

In the 2000s, lo­cal busi­ness­man Trevor Hosten found­ed PIRG Trinidad (Pub­lic In­ter­est Re­search Group), and spent over a mil­lion dol­lars on bill­boards protest­ing what he de­scribed as the ex­ploita­tive na­ture of lo­cal banks.

How­ev­er, the is­sue per­sist­ed with con­sumers con­sis­tent­ly stat­ing griev­ances about bank­ing fees be­ing a hin­drance to many. As a re­sult, a ‘Joint Se­lect Com­mit­tee on Fi­nance and Le­gal Af­fairs: In­quiry in­to Com­mer­cial Bank­ing Fees in Trinidad and To­ba­go’ was es­tab­lished and a sub­se­quent re­port was pub­lished from its find­ings.

Ac­cord­ing to a US-based fi­nan­cial ad­vi­sor Prakash Ram­lakhan, who was an econ­o­mist who pro­vid­ed a re­port cit­ed in that JSC re­port, very lit­tle has been ac­tioned since then.

“Noth­ing was done. How­ev­er, we have to recog­nise that there was ba­si­cal­ly a freeze. There were no added fees or in­crease in the ex­ist­ing fees,” said Ram­lakhan in a tele­phone in­ter­view with Sun­day Busi­ness Guardian.

That freeze stood un­til Fri­day, when T&T’s largest com­mer­cial bank, Re­pub­lic Bank im­ple­ment­ed new fees for sev­er­al ser­vices re­lat­ed to cheque books, drafts, man­ag­er’s cheques, over­drafts, and late pay­ments, once again reignit­ing com­men­tary on the mat­ter.

While the im­pact on cus­tomers and busi­ness­es was ac­knowl­edged by Trinidad and To­ba­go Cham­ber of In­dus­try and Com­merce Pres­i­dent and Re­pub­lic Fi­nan­cial Hold­ings Ltd (RFHL) vice pres­i­dent, Karen Yip Chuck, she point­ed out that the cost of bank­ing busi­ness had been im­pact­ed sig­nif­i­cant­ly by cy­ber­se­cu­ri­ty con­cerns and reg­u­la­tions re­quired for an­ti-mon­ey laun­der­ing frame­works.

While Ram­lakhan said lo­cal banks have to com­ply with in­ter­na­tion­al bank­ing reg­u­la­tions out­lined by the Bank for In­ter­na­tion­al Set­tle­ment, he said, based on da­ta he had seen, these rea­sons gave lit­tle jus­ti­fi­ca­tion for the in­crease.

“Reg­u­la­to­ry com­pli­ance (costs are) very small. It is not oner­ous on banks; it’s not go­ing to af­fect their bot­tom line in any sig­nif­i­cant way. So that’s un­der­stood. On the oth­er side, you have cost sav­ings with tech­no­log­i­cal adop­tion, and we have seen banks rapid­ly move to­wards the em­brace of new tech­nol­o­gy. Now you are be­ing pe­nalised for join­ing the line in the bank, so more peo­ple are us­ing on­line bank­ing. They’re us­ing the plas­tics, the cards, and there­fore the banks are al­so sav­ing. When you look at the per­for­mance of banks, we have seen an in­crease in the prof­itabil­i­ty now,” said Ram­lakhan.

He said his analy­sis of fi­nan­cial da­ta col­lect­ed in 2024 and 2025 showed that banks were con­sis­tent­ly re­ceiv­ing more mon­ey from bank­ing fees as op­posed to what they paid in out in in­ter­est rates on de­posit ac­counts.

“I can­not sup­port any jus­ti­fi­ca­tion for a fee in­crease with­out an im­prove­ment in prod­ucts and ser­vices. I’m not see­ing that hap­pen­ing. So, I think banks need to ar­tic­u­late to the pub­lic in a sim­ple and tan­gi­ble way, how the in­crease in fees would ben­e­fit the cus­tomers, whether you’re a de­pos­i­tor, a bor­row­er or just us­ing the ser­vices for forex, as the case may be.”

Chair of the 2017 JSC, In­de­pen­dent Sen­a­tor and se­nior coun­sel Sophia Chote did not com­ment on the de­vel­op­ment on Fri­day when con­tact­ed, in­stead sug­gest­ing that ques­tions on the mat­ter be ad­dressed to Min­is­ter of Fi­nance Dav­en­dranath Tan­coo.

Min­is­ter Tan­coo al­so did not re­spond to a re­quest for com­ment on Re­pub­lic Bank’s de­ci­sion on Fri­day.

How­ev­er, in Oc­to­ber, not long af­ter his bud­get pre­sen­ta­tion at the post-bud­get fo­rum host­ed by the T&T Man­u­fac­tur­ers’ As­so­ci­a­tion, Tan­coo did warn that cit­i­zens should brace for the pos­si­bil­i­ty of in­creased bank charges fol­low­ing the Gov­ern­ment’s de­ci­sion to im­ple­ment a 0.25 per cent as­set levy on com­mer­cial banks and in­sur­ance com­pa­nies.

Ram­lakhan sim­i­lar­ly opined that the hit tak­en by banks by the in­creased tax would have prompt­ed fee ad­just­ments.

“What I’ve seen re­cent­ly is an in­crease in the tax­a­tion on banks’ prof­its, and I am not sure, but I’m in­clined to be­lieve that the in­crease in fees, at this point in time, can­not be jus­ti­fied in any way by in­creas­ing ex­pens­es, be­cause banks are more prof­itable,” said Ram­lakhan.

Ear­li­er in the week, an­oth­er econ­o­mist, Dr Ronald Ramkissoon, had called on the Cen­tral Bank and oth­er reg­u­la­to­ry bod­ies to ad­dress the is­sue.

JSC rec­om­men­da­tions

As for what ac­tion was tak­en fol­low­ing the 2017 JSC, the Cen­tral Bank said, “The Cen­tral Bank has tak­en sev­er­al steps to im­ple­ment the rec­om­men­da­tions of the JSC Re­port. Chief among these is the is­suance of the Mar­ket Con­duct Guide­line for In­sti­tu­tions Li­censed un­der the Fi­nan­cial In­sti­tu­tions Act, 2008 (No­vem­ber 2018), which sets out the Bank’s ex­pec­ta­tions re­gard­ing the mar­ket con­duct of com­mer­cial banks.

“The Guide­line seeks to en­sure that banks im­ple­ment prop­er mar­ket con­duct prac­tices, poli­cies and pro­ce­dures to fa­cil­i­tate a sus­tain­able, fair and sound fi­nan­cial en­vi­ron­ment for cus­tomers. While the Cen­tral Bank recog­nis­es that banks are prof­it-mak­ing en­ti­ties, they are equal­ly re­quired to en­sure that their ac­tions do not di­rect­ly or in­di­rect­ly prej­u­dice the in­ter­ests of de­pos­i­tors. The Guide­line al­so gives ef­fect to the rec­om­men­da­tion for greater trans­paren­cy from com­mer­cial banks re­gard­ing the ra­tio­nale for fee ad­just­ments.”

No­tably, in March 2025, then Prime Min­is­ter Stu­art Young met with the bank­ing sec­tor and then Cen­tral Bank gov­er­nor Dr Alvin Hi­laire, with for­eign ex­change dis­tri­b­u­tion and bank­ing fees among the top­ics dis­cussed.

Young opt­ed not to com­ment on the mat­ter when con­tact­ed by the Busi­ness Guardian on Fri­day. 1. Do com­mer­cial banks alert the Cen­tralT The Cen­tral Bank’s ver­ba­tim re­spons­es on May 1 to the Sun­day Busi­ness Guardian’s ques­tions on Re­pub­lic Bank’s fee hikes Q: Do com­mer­cial banks alert the Cen­tral Bank when they are about to ad­just their fees?

A: Yes, com­mer­cial banks for­mal­ly no­ti­fy the Cen­tral Bank of Trinidad and To­ba­go of the in­ten­tion to ad­just their fees. The Cen­tral Bank’s Mar­ket Con­duct Guide­line for in­sti­tu­tions li­censed un­der the Fi­nan­cial In­sti­tu­tions Act (2018) re­quires com­mer­cial banks to dis­close in­for­ma­tion on fees and charges and to pro­vide cus­tomers with at least 30 days’ writ­ten no­tice of any pro­posed change. Banks are al­so re­quired to dis­play the no­tice at their of­fices and on their web­site for at least 30 days be­fore the ef­fec­tive date of any in­crease.

Q: Does the Cen­tral Bank reg­u­late com­mer­cial bank fees in Trinidad and To­ba­go?

A:No, the Cen­tral Bank does not reg­u­late com­mer­cial bank fees in Trinidad and To­ba­go di­rect­ly. The Cen­tral Bank’s leg­isla­tive au­thor­i­ty to reg­u­late fees and charges is de­fined by Sec­tion 44A(1) of the Cen­tral Bank Act and is lim­it­ed to fix­ing max­i­mum and min­i­mum in­ter­est rates, fees and charges on loans, ad­vances and oth­er cred­it fa­cil­i­ties. This pro­vi­sion does not ex­tend to gen­er­al ser­vice fees such as de­posit ac­count fees, in-branch trans­ac­tion charges or ATM fees. More broad­ly, the Cen­tral Bank ex­er­cis­es over­sight of fee-re­lat­ed con­duct through its Mar­ket Con­duct Guide­line, which es­tab­lish­es stan­dards for trans­paren­cy, dis­clo­sure and the fair treat­ment of cus­tomers in con­nec­tion with fees and charges.

Q: Does the Cen­tral Bank use moral sua­sion to per­suade com­mer­cial banks not to im­ple­ment a fee in­crease?

A: Yes, the Cen­tral Bank us­es moral sua­sion as ap­pro­pri­ate, through con­sul­ta­tion with com­mer­cial banks on mat­ters re­lat­ing to fees and charges, in­clud­ing through its quar­ter­ly meet­ings with the sec­tor. The Mar­ket Con­duct Guide­line for In­sti­tu­tions Li­censed un­der the Fi­nan­cial In­sti­tu­tions Act, 2008 sets out clear stan­dards on the trans­paren­cy of pric­ing, the ad­e­qua­cy of cus­tomer no­tice, and the fair treat­ment of all cus­tomer seg­ments. Where a bank’s con­duct falls short of those stan­dards, the Cen­tral Bank en­gages with the in­sti­tu­tion di­rect­ly to ad­dress the gaps.

Q: Is it a rea­son­able ar­gu­ment that cus­tomers who are dis­sat­is­fied with fee in­creas­es can sim­ply choose an­oth­er bank?

A: While cus­tomers do have the right to take their bank­ing busi­ness else­where, and the Cen­tral Bank en­cour­ages cit­i­zens to com­pare fees and oth­er bank­ing ser­vices across all com­mer­cial banks us­ing the Com­par­a­tive Sched­ule pub­lished on our web­site, the Bank recog­nis­es that switch­ing is not with­out cost or chal­lenges. Cus­tomers who hold both de­posit and cred­it fa­cil­i­ties at the same bank may face ad­di­tion­al oblig­a­tions in the process. De­pend­ing on the na­ture of the cred­it arrange­ments in place, a cus­tomer seek­ing to move to an­oth­er in­sti­tu­tion may be re­quired to pro­vide a pe­ri­od of no­tice, and set­tle out­stand­ing debt oblig­a­tions – among oth­er re­quire­ments, be­fore be­ing in a po­si­tion to ac­cess equiv­a­lent fa­cil­i­ties at an­oth­er bank. The Cen­tral Bank con­sid­ers this a rel­e­vant fac­tor in as­sess­ing the prac­ti­cal choic­es avail­able to con­sumers.

Q: Has the Cen­tral Bank been in con­tact with Re­pub­lic Bank over the fee in­creas­es?

A: Yes, the Cen­tral Bank is cur­rent­ly in dis­cus­sion with Re­pub­lic Bank on the mat­ter to un­der­stand whether al­ter­na­tive cours­es of ac­tion were ex­plored; their as­sess­ment of the im­pact of the changes on par­tic­u­lar cat­e­gories of cus­tomers and how and when cus­tomers were no­ti­fied of the changes.

Q: Is there a re­la­tion­ship be­tween the Gov­ern­ment’s im­po­si­tion of the as­set levy on com­mer­cial banks and the in­crease in fees?

A: The Cen­tral Bank is not in a po­si­tion to con­firm whether the fee in­creas­es are di­rect­ly at­trib­ut­able to the as­set levy, as com­mer­cial banks face a range of op­er­a­tional costs and busi­ness con­sid­er­a­tions that may in­flu­ence their pric­ing de­ci­sions. The Bank can share at this time that most of Re­pub­lic Bank’s new fees are with­in the range of the ex­ist­ing fees for the oth­er com­mer­cial banks.

Q: Is the Cen­tral Bank go­ing to un­der­take a study to as­sess the im­pact of the fee in­creas­es?

A: The Cen­tral Bank will make an as­sess­ment though en­gage­ment with Re­pub­lic Bank and will con­tin­ue to mon­i­tor de­vel­op­ments across the com­mer­cial bank­ing sec­tor through its on­go­ing Mar­ket Con­duct su­per­vi­sion frame­work. The Bank pub­lish­es its Com­par­a­tive Sched­ule of Fees and Charges for all com­mer­cial banks an­nu­al­ly, which serves as an im­por­tant tool for track­ing fee trends sec­tor-wide. Where the Bank’s re­view iden­ti­fies con­cerns that war­rant fur­ther ac­tion, it will not hes­i­tate to act as ap­pro­pri­ate with­in the re­mit of the law.

Q: Does the Cen­tral Bank col­lect da­ta on the ag­gre­gate fees col­lect­ed by lo­cal com­mer­cial banks?

A: Yes, the Cen­tral Bank col­lects da­ta on fees and charges across the com­mer­cial bank­ing sec­tor and pub­lish­es the Com­par­a­tive Sched­ule of Fees and Charges for all com­mer­cial banks. This sched­ule pro­vides a com­pre­hen­sive com­par­i­son of fees ap­plied by each in­sti­tu­tion and is avail­able to the pub­lic to sup­port in­formed de­ci­sion-mak­ing.

Q: What el­e­ments of the re­port of the Joint Se­lect Com­mit­tee on Fi­nance and Le­gal Af­fairs] In­quiry in­to Com­mer­cial Bank­ing Fees in Trinidad and To­ba­go,’ has the CBTT im­ple­ment­ed?

A: The Cen­tral Bank has tak­en sev­er­al steps to im­ple­ment the rec­om­men­da­tions of the JSC Re­port. Chief among these is the is­suance of the Mar­ket Con­duct Guide­line for In­sti­tu­tions Li­censed un­der the Fi­nan­cial In­sti­tu­tions Act, 2008 (No­vem­ber 2018), which sets out the Bank’s ex­pec­ta­tions re­gard­ing the mar­ket con­duct of com­mer­cial banks. The Guide­line seeks to en­sure that banks im­ple­ment prop­er mar­ket con­duct prac­tices, poli­cies and pro­ce­dures to fa­cil­i­tate a sus­tain­able, fair and sound fi­nan­cial en­vi­ron­ment for cus­tomers. While the Cen­tral Bank recog­nis­es that banks are prof­it-mak­ing en­ti­ties, they are equal­ly re­quired to en­sure that their ac­tions do not di­rect­ly or in­di­rect­ly prej­u­dice the in­ter­ests of de­pos­i­tors. The Guide­line al­so gives ef­fect to the rec­om­men­da­tion for greater trans­paren­cy from com­mer­cial banks re­gard­ing the ra­tio­nale for fee ad­just­ments.

In the area of con­sumer rights and pro­tec­tion, the Of­fice of the Fi­nan­cial Ser­vices Om­buds­man (OF­SO) has sig­nif­i­cant­ly ex­pand­ed its ef­forts, re­sources and ser­vice avail­abil­i­ty since 2017 in pro­mot­ing a cul­ture of con­sumer rights knowl­edge and ad­vo­ca­cy, with par­tic­u­lar at­ten­tion to the more vul­ner­a­ble in so­ci­ety.

On fi­nan­cial in­clu­sion, the Cen­tral Bank is­sued Sim­pli­fied Due Dili­gence (SDD) re­quire­ments for Ba­sic Bank­ing Ac­counts in 2021, open­ing a path­way for the com­mer­cial banks to de­vel­op prod­ucts and ser­vices for in­di­vid­u­als and mi­cro-en­ter­pris­es to open and main­tain ac­counts with min­i­mal doc­u­men­ta­tion and at re­duced cost. All com­mer­cial banks are re­quired to of­fer these ac­counts.

The Bank has al­so broad­ened the reach and im­pact of the Na­tion­al Fi­nan­cial Lit­er­a­cy Pro­gramme (NFLP), which de­liv­ers fi­nan­cial ed­u­ca­tion to the pub­lic with a par­tic­u­lar fo­cus on the school pop­u­la­tion and those in re­mote com­mu­ni­ties.

The Cen­tral Bank con­tin­ues its on­go­ing en­gage­ment with the Bankers As­so­ci­a­tion of Trinidad and To­ba­go (BATT) to be able to as­sess changes in the sec­tor in re­al time.