by Linda Straker
Mr Mike Sylvester, Permanent Secretary in the Ministry of Finance has refuted claims that increased banking fees are a result of the Value Added Tax (VAT) which Grenada adopted since 2010 — and says that it is a consequence of the banks taking a decision to charge for their services.
Explaining that from the start of implementing the VAT system, banks were mandated to charge VAT on certain services, Sylvester said that the recent increase has nothing to do with the broadening of the VAT base.
“The broadening of the VAT base will require parliamentary approval and that was not done… It must be understood that from the start, there was VAT on specific banking fees such as safety deposit box or credit card renewal fees,” said Sylvester, when he addressed the post-Cabinet weekly briefing on Tuesday morning. “You have an increase in banking fees and that is a separate issue, because these fees are not regulated by Government or the Eastern Caribbean Central Bank,” he added.
Advising that it does not have the powers to regulate commercial banks’ fees and charges, the Eastern Caribbean Central Bank (ECCB) in a recent statement said that it was concerned about the increase in commercial banks’ fees and charges across the Eastern Caribbean Currency Union (ECCU) and the effects on depositors.
Recommending that commercial banks operating within the ECCU explain their rationale for the increases in fees and charges to their customers and the public at large, the ECCB said that the issue of bank fees and charges was recently discussed by the Monetary Council which is the highest decision-making body of the ECCB.
Economic Affairs and Planning Minister Oliver Joseph said that these are indications that the new fees have backfired on the banks, because people are closing down accounts. He further called on the banks to explain the reason behind the increase in monthly fees.
“These fees are not related to VAT, because VAT started since in 2010 and these fees are recent,” he said.
Thousands of customers in Grenada and across the Eastern Caribbean have closed down accounts at the RBTT Bank, since it enforced a EC$25 monthly fee on regular saving deposit accounts.
NOW Grenada is not responsible for the opinions, statements or media content presented by contributors. In case of abuse, click here to report.