By law, it is the role of the Eastern Caribbean Central Bank (ECCB) to supervise and regulate all banking activity within the Eastern Caribbean Currency Union (ECCU), and the Governments within the region do not have any authority to regulate bank charges and fees. Those are properly contractual matters between banks and their customers, and are informed by prevailing market conditions.
The Monetary Council and the Board of Directors govern the work of the ECCB. The Monetary Council comprises eight Ministers of Finance, one from each member government within the Union. Prime Minister Dr. the Honourable Timothy Harris, who is the Minister of Finance in St. Kitts and Nevis, has sat on the Monetary Council since February 2015. It is also worth mentioning that the issue of bank fees is a longstanding one that has come before the Monetary Council on a number of occasions, including during the tenure of the former government.
Indeed, at the ECCB Monetary Council’s 80th meeting on October 31st, 2014, according to the issued Communiqué, “Council expressed concern with regard to commercial bank charges and indicated that some action needed to be taken to address this matter.” In attendance at this meeting was the Minister of Finance of St. Kitts and Nevis who is now the leader of the Opposition.
My Government has been made aware that banking fees have now been increased and/or new fees introduced at some commercial banks operating within St. Kitts and Nevis and the wider Caribbean region. These increases and those proposed have led to unease among the population, and some customers are exercising their right to withdraw their funds. The fee structures being proposed in St. Kitts and Nevis are similar to those also being proposed in other territories of the Caribbean, and customers in some of those jurisdictions have responded also with unease.
The politicization of this matter is therefore regrettable, and must be seen as a desperate and irresponsible attempt to undermine public confidence in the country’s banking system, which the International Monetary Fund (IMF) just last week commended as being stable.
The Team Unity Government’s legislative agenda also received excellent reviews from the IMF. According to the IMF, “Implementing the new Banking Law, ratified by the Parliament in 2015, will raise capital cushions and enable the ECCB to conduct consolidated and risk-based supervision. Further strengthening of the supervisory frameworks would help capture weaknesses in growing market segments.”
It also bears mentioning that all of the Opposition Members of Parliament vociferously opposed the passage of the Banking Bill, which was gazetted in August 2015. The Banking Act, which is uniformly in force throughout the ECCU, ensures the safety and soundness of the financial system by enhancing the powers of the ECCB.
At its 83rd meeting on November 6th, 2015, the Monetary Council agreed that, in the short to medium term, a Working Group should be formed to review commercial bank fees and charges, and that moral suasion should be used to encourage restraint in the banks’ setting of fees. It was also agreed that a revision of the ECCB’s Code of Best Practice for financial institutions licensed under the Banking Act was needed in order to make specific sections legally enforceable. It was further agreed that, in the long term, an Office of the Ombudsman for Financial Services should be established.
I am advised that on or about May 3rd, 2016, the Eastern Caribbean Central Bank announced that it had set up a committee to examine the issue of commercial bank fees. This committee was formed at the behest of this Government, as well as colleague Governments in the Eastern Caribbean Currency Union.
My Government regrets any inconvenience or hardship caused to our public by any new or increased fees at commercial banks and urges the recently established ECCB Committee to expedite its consideration and report on this important issue.
Whilst we await the work of the ECCB Committee, I appeal to our citizenry to remain calm and to exercise prudence in dealing with their private banking affairs. All banks operating within St. Kitts and Nevis are financially strong and are well regulated by the ECCB. The people of St. Kitts and Nevis can be assured that the health of our banking sector is good and that this Government, having already passed and shortly to bring into force the new Banking Act, will continue to take the necessary legislative and policy actions to support the ECCB and the banking sector in St. Kitts and Nevis.
I also urge all persons of whatever political persuasion, and commentators, to be prudent and sensible in their words and actions, bearing in mind that the issue of commercial banking fees predates this Unity Government. Irresponsible utterances and actions will do nothing to ensure that our banking sector remains strong and continues to serve the people of St. Kitts and Nevis.