The Central Bank of Trinidad and Tobago has started engaging Republic Bank directly after the bank announced fee increases on a number of services which came into effect on May 1.
In acknowledging public concerns generated from the rise in fees, Central Bank Governor Larry Howai stated yesterday, “We understand why citizens are frustrated, and we do not take this sentiment lightly. Over the years, we have closely monitored fees and charges of commercial banks, and the data on this remains publicly available on our website.”
He said in a release issued by the Central Bank: “While our role as Regulator is defined by law, it is not a passive one. Citizens deserve a financial system that works in their interest, and the Central Bank will continue to advocate for that.”
The Central Bank stated that 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.
“This provision does not extend to general service fees such as deposit account fees, in-branch transaction charges or ATM fees. The Central Bank’s authority in respect of those fees is exercised through its Market Conduct Guideline for Institutions Licensed under the Financial Institutions Act (2018), which establishes standards for transparency, disclosure and the fair treatment of customers. Banks are expected to comply with the Guideline,” it stated.
The Central Bank affirmed its commitment to addressing the challenge of increases in bank fees and charges, especially considering the level of profits declared by the banks, and stated it recently surveyed six commercial banks.
“As part of its efforts to influence decision making in relation to fees and charges, the Bank recently surveyed six commercial banks to obtain a comprehensive understanding of the philosophy and practices, including governance and controls, surrounding banks’ fees and charges,” it explained.
It said a report based on the findings of the survey and recommendations for the way forward is being finalised for sharing with the industry and for implementation following consultation.
Among the mechanisms the Central Bank considers important is the availability of Basic Banking Accounts, which are required to be offered by all commercial banks under Simplified Due Diligence Guidelines issued by the Central Bank in 2021.
“These accounts are specifically designed to ensure that low-income individuals and micro-enterprises can access banking services with minimal documentation and at reduced cost. Citizens and small businesses affected by the current fee changes are encouraged to enquire about these options at their commercial bank,” it stated.
The Central Bank added that it was actively reviewing the scope and Terms of Reference of the Office of the Financial Services Ombudsman (OFSO) to expand the support available to consumers in the financial system.
“The Bank also continues to intensify the reach of the National Financial Literacy Programme, so that citizens are better equipped to understand their rights, compare their banking options and make financial decisions that serve their own best interests,” it stated.
The Central Bank urged people to use its annual Comparative Schedule of Fees and Charges for all commercial banks available at https://www.central-bank.org.tt/statistics/fees-and-charges to support informed decision-making.
‘Immediate
financial impact’
The Confederation of Regional Business Chambers (CRBC) yesterday acknowledged the Central Bank’s statement, but noted it does not yet address the immediate financial impact being felt by businesses and customers following the fee increases by Republic Bank.
“Small and medium enterprises (SMEs), as well as everyday banking customers are already under pressure from rising costs and constrained economic conditions.
“In that context, increased banking fees are not simply an inconvenience, they directly affect the cost of doing business and the cost of living. For SMEs in particular, banking services are essential to daily operations, making these additional charges unavoidable and burdensome,” it stated via WhatsApp yesterday.
It said it did not support the timing or scale of the fee increases.
“While we acknowledge the Central Bank’s role and its stated engagement, we believe stronger and more decisive action is required to ensure that fee structures remain fair, transparent, and aligned with the broader economic realities facing the country.
“We are calling for greater transparency from the banking sector on the justification for these increases, and for a more inclusive dialogue involving regulators, financial institutions, and business representatives,” the CRBC stated.
It called for consideration to also be given to measures that would cushion the impact on SMEs and vulnerable customers during this period.
“A financial system must work not only efficiently, but equitably. At this time, there is a growing perception that the balance is not being maintained and that is a concern that must be urgently addressed,” the CRBC stated.
It stated that at a minimum, consideration should be given to measures that protect SMEs from additional financial strain during this period of economic adjustment.
“The stability and growth of Trinidad and Tobago’s economy depend heavily on the resilience of its business community. Any action that increases the cost of doing business without corresponding value must be carefully reconsidered,” the CRBC stated.
It also called for stronger regulatory action, stating, “We respectfully submit that monitoring and engagement, while important, must be accompanied by stronger regulatory action and clearer policy direction to ensure that fee structures remain fair, justified, and aligned with national economic priorities.”
CRBC chairman Vivek Charran told the Express yesterday: “This is not the Republic Bank I know and that has held the hand of SMEs for some three generations. This is a different bank.”
On April 27, several business chamber heads raised concerns over fee increases and warned that small operators will be hit the hardest after the bank announced the increase in fees.
CRBC argued then the increases would place additional pressure on already-struggling SMEs, adding that it does not support the move at this time.
In a statement sent to the Express at the time, the CRBC stated, “At a time SMEs are already navigating high operating costs, limited access to foreign exchange, and reduced consumer spending, any additional financial burden is deeply troubling. These increases will inevitably raise the cost of doing business and place further strain on already vulnerable enterprises.”
President of the Chaguanas Chamber of Industry and Commerce Baldath Maharaj echoed similar sentiments and said financial institutions must periodically review their pricing models as the timing and scale of these adjustments are now a hurdle for SMEs.
He noted that businesses are operating on a thin margin and are often unable to absorb these costs; the increases may be passed on to the customer.
President of the Greater San Fernando Area Chamber of Commerce Kiran Singh said the magnitude and timing of these increases were deeply concerning, particularly when viewed against the current performance of the financial services sector, which is proven to be highly profitable compared to the SME sector.
President of the Tourism Industry Association of T&T Lisa Shandilya said these new fees would affect smaller operators such as guesthouses, independent tour guides, and small hospitality businesses that rely heavily on short-term financing.
“These entities are especially vulnerable to increased banking charges and penalties,” she noted.
President of the Owners Dealers Association Reval Chattergoon said the situation was worrisome given the strong push for a cashless society, but not surprising.
Neither Republic Bank nor Finance Minister Davendranath Tancoo could be immediately reached for comment yesterday.
When it first announced the increases, the bank said it was “part of our ongoing review of our products and services”.
