Chaguanas Chamber complains of "exploitative" bank charges and interest ratesThe Chaguanas Chamber of Commerce is complaining about the what it sees as exploitation on the path of commercial banks, at a time when many are forced to make cutbacks to keep businesses alive.
The Chamber is taking issue with the disparities between the interest rates for lending and savings, and the costs involved in doing business with the banks.
The Chamber issued the following statement today on the matter.
"The Chaguanas Chamber is deeply perturbed by the current state of the economy of Trinidad and Tobago and the ongoing demise of a number of business organizations over the past year.
As the national economy has continued to contract, businesses have been forced to adopt various strategies in order to cut costs, manage cash flow, and realign their operations in order to stay afloat.
Under these present economic conditions revenue streams have become thinner and profits are declining.
Yet, even as we have seen companies fail, we note that there are organizations that operate within the financial sector who continue to grow large profits, namely the commercial banks.
The very survival of our failing business entities depend on how responsive they can become during such challenging times. However, the banking sector seem not to have taken note of this.
The Chaguanas Chamber is concerned that the existing gap between the deposit rate and lending rate is far too wide. As a result, research showed, that the interest rate spreads among the commercial banks and perhaps other similar financial institutions are among the largest in countries that have open economies.
We urge the banks to reflect and do something about this urgently.
The Hon Minister of Finance in responding to a question from the Opposition gave an assurance in Parliament recently that he will ask the Central Bank to look into the matter of savings rates versus lending rates in order to manage the spread in an equitable way. We are hopeful that this has been done.
Banks in this country also need to look to revising their service charges which, in some cases, can be deemed ridiculous and exploitative.
For example, persons are charged fees for encashing cheques in banks where they don’t have any accounts.
The fact that there have been no decreases in prime lending and overdraft rates could reflect a lack of interest by the banks in adapting like other business organizations, and share in the burden of adjustment within this very challenging economic environment.
It must be noted, however, that the commercial banks tend to increase their lending rates when the Central Bank’s repo rate rises. There is some potential for this repo rate to increase further in the coming year due to anticipated actions of the United States Federal Reserve. It is also one of the many tools used to combat inflation.
The commercial banks must realize that this economic recession is deepening and intensifying.
People are losing their jobs and businesses are under immense stress. Citizens are under pressure to pay their loans, mortgages and credit cards. Therefore, we call on the banks to be much more sensitive and work with their clients for mutual interest and for the best development of our country and our people."
Source:
http://www.cnc3.co.tt/press-release/cha ... rest-rates
