Once upon a time, people were encouraged to put their money in the bank. There it was considered to be in a safe place.
Below mattresses were not considered safe because you could be robbed. Savings in banks were also supposed to be good for the economy as the theory was that savings had a symbiotic relationship with investment. Once upon a time too, banks were robbed because that was where the money was! Now, banks rob people. Not only people are robbed, but banks do not want people in them; witness the lines of people outside banks in town, Grand Anse and Grenville braving the sun, and, sometimes, rain, trying to get in!
If you manage to open an account at any bank these days, deposit $100 on it; go back a year later and see how much is left, if any! It is nothing short of robbery! Once upon a time, you put money in the bank and you got interest. You had a passbook and every time you went to the bank the teller would write in your deposit, sometimes even pennies were accepted, and they would write in the 4% per annum interest your money had earned. These days if you manage to open a savings account, you might get 2% interest, a move sanctioned by the Central Bank about 6 or 7 years ago!
These days you open an account and you get charges. It is almost impossible to put money on fixed deposit in our banks. They telling you to your face that they don’t want it. In any case, whatever account you open you are liable to get charged. The favourite term is “maintenance fee” or some such nomenclature, not much different from child support or alimony. In fact, gone are the days when banks depended mainly on the interest they charged borrowers on loans. They now pride themselves on what, on their financial statements, they call “non-interest income.” This category of income is made up (i) income from investments; (ii) fees and (iii) charges. So, in this the computer age, where almost everything is operating like magic, and automatically, with very limited human intervention, the maintenance fee kicks onto your account come the 28th, 30th, or 31st of every month; and it is applied whether or not you had any transaction on your account. They should re-name it ‘holding fee’ — for holding an account for you!
Once upon a time, when savings were encouraged, you walked in the bank, and in 2-twos you practically walked out with a loan based on the amount you had saved, a letter from your employer, and the banker’s belief that you would repay the loan. Nowadays they almost want to know where you slept last night, and with who, and if you have more security or collateral than you borrowing! When they ready for you — and don’t call them, nobody answers any of the phones in any bank … they really don’t want you — you get a 2 or 3-page “offer letter” and you have to go by your old school teacher or a lawyer to unravel the document for you. If you reach this stage, is now fees and charges start. The favourite is “negotiating” or “processing” fee and this could be up to 1% of the amount you borrowing! But what negotiation you paying for? TAWU or other TUC member represented you? You did not negotiate with the bank; the bank lends you “OPM”, or other people’s money they have on deposit. Then you are charged legal fees — for the bank’s lawyers — and don’t ask to use your own lawyer, the bank will get vex! You don’t even get to see the bank’s lawyer; you are just called in to sign the mortgage deed. It’s worse when you manage to finish paying off the loan; the bank’s lawyer will take up to two years to document you back your property. You also have penalties for not being able to make a loan payment on time! Then you have other fees and penalties such as a charge for paying off your loan too early!
And, believe it or not, bank fees and charges are not regulated, like a food licence; in short, they could charge what they want. Should the Central Bank be required to have public consultations on fees and charges? Should the Central Bank have a window to handle consumer or user complaints? If these mechanisms exist is the public aware?
So, when there are less banks, get worried. It is not that they may not be stronger, but healthy competition and innovation are diminished. Beware!