Karl Samuda, Minister of Industry, levelled the criticism based on the results of a survey done by the Consumer Affairs Commission.

Dionne Rose, Business Reporter

Jamaica's commercial banks are imposing unreasonable charges on customers, according to Industry and Commerce Minister, Karl Samuda, who levelled the criticism based on the results of a survey done by the Consumer Affairs Commission (CAC).

But the bankers' lobby group, in defence of the sector, has said their practices are no different from banks worldwide, and that charges are disclosed to the public.

A Sunday Business review of the accounts of the two largest banks, both of which made super profits last year, shows that the fees are a multi-billion-dollar source of revenues.

National Commercial Bank earned $4.7 billion from fee and commission income, while Scotiabank Jamaica made $4.1 billion.

Not only are the fees too large, varying widely across banks, said Samuda, they were also stifling small businesses, he added.

"It was amazing to see the differentials that exist; it was also quite stunning to see the level of charges," Samuda said at a forum in Kingston this month.

The CAC tells Sunday Business that the survey to which the minister referred was still in draft form, but would soon be published.

Until then, CAC chief executive officer Dolsie Allen said the agency would not comment on the findings nor disclose them.

But, said Samuda: "There was a case in point that I raise, where to my certain knowledge someone requested simply a statement on the balance on their account. A matter that took less than half an hour cost $1,000, just to get the balance on their account."

He also noted that the uncomplicated procedure of trans-ferring funds from a savings account to a current account also incurred a fee.

"So, when I look at the cost of transferring from savings to your current to protect your cheque, that cost is in excess of $1,000," he said.

Great impact

"When one looks at all these charges, you can have an appreciation of the impact that can have on small entrepreneurs."

But the banks maintain that their fees are priced to offset costs to deliver banking services to clients.

"Individual banks independently determine their pricing policy according to the respective costs of their services and market conditions," said Jamaica Bankers' Association president, Patrick Hylton, in an emailed response sent via the association's secretariat.

"Based on the competitive environment in which we operate, some banks may have higher or lower rates than others across services.

"This is not peculiar to Jamaica and when a comparison is made with other banks regionally and internationally, you will find that this is also what occurs."

Hylton said banks generally published fees and rates in brochures which are distributed to the public and are posted on the banks' websites.

Some services, he added, are offered 'free' or at 'lower costs' when accessed via electronic channels.

"Each member determines whether to discount or waive their charges based on the transaction being done, as happens in other businesses," he said.

15-page fee guide

National Commercial Bank's fee guide, last updated November 1, 2007, is 15 pages long and available on the bank's website.

Scotiabank Jamaica has its fee guide framed and mounted on the wall of its branches, making it highly visible but not so easy for clients to consult.

Its deposit, foreign exchange and loan rates are available on its website. Samuda urged financial institutions to give small businesses a break.

"One of the things that we find that the banks need to consider - and I appealed to them - is the notion that someone without collateral can start a small, modest business and move on to be a multibillion-dollar business," said Samuda.

"But it takes the commitment and confidence in that person or that group of people to give them that initial start. and I am not happy that that process is one that is really attended enough by the banking community," he added.

dionne.rose@gleanerjm.com