Central Bank of Belize Announces Changes to Banking Fees in 2024

Central Bank of Belize Announces Changes to Banking Fees in 2024

The Central Bank of Belize held its second 2023 press brief today where it announced adjustments in banking fees come January 2024.  The fees, according to Governor Kareem Michael, are primarily for the everyday consumers, and includes online transfers, ATM transactions as well as maintenance fees.  Governor Michael noted that this measure is the Central Bank’s way of addressing systems that don’t promote the fundamentals of financial inclusion for its consumers.  From the Central Bank’s perspective, they are foregoing the 25 and 50 cents they collect from every online transaction.

Kareem Michael, Central Bank Governor: “With effect, 2nd January 2024, the Central Bank will require domestic banks to limit and desist from imposing the following fees and charges. All banks must reduce or limit ATM withdrawal fees to a maximum of 25 cents per transaction. The banks have also committed to reviewing these fees over the next 12 months. This is sort of a transition period with the aim of reducing them further or applying thresholds based on the level of activity and type of customers in the system. Dormant account fees typically most banks would charge for any account that is deemed dormant according to the Domestic Banks and Financial Institutions Act and would charge a range between twenty and forty five dollars in case you never did one transaction in the account on an annual basis that wold come out.  Account closure, so let’s say you open an account one day and within that day to three months you decide to close it typically most banks walk away with $27 or $30 out of that account. Salary release cancellation, when you have paid off your loan at a commercial bank and your salary used to go directly there to service that loan just to change that arrangement internally within the software or within the bank’s operations you would have been charged maybe 15 to 30 dollars. Maintenance fees. Now if you just park your money at the bank on a monthly basis you might get a charge just for maintaining this electronic account on a monthly basis. And that’s between, depending on the account $1 to $5. Transfers within the same bank again, I should say that none of these things are across the board. Some banks do it some banks don’t so this doesn’t target any bank this is targeting, this is looking at the practices across the board within the financial system. Transfers within the same bank sometimes you as a customer of bank would be charged for just transferring to another customer within that same bank. Waiver fees similarly if you ask for a lee break, if your cash flow is not too good on a loan and you ask for a lee break for a month, you’re going to get charged $20 to $50 just for that waiver. Early loan payout fees well as a bank I don’t want you to pay this thing out and of course it messes up their cash flow projections over the course of time or how they had planned out their portfolio. But that payout interest would have been upfront, that payout fee would have been sometimes between one to six months interest just to walk away from an early payout if you had the money. So we’re saying, man, restrict this to three months that’s reasonable and that’s all we’re doing here. We’ve also received a verbal written commitment, I call it an indicative commitment from the banks that they will also bring down what they charge customers for the instant funds transfer and also the electronic funds transfer. So those mobile transactions, digital transactions that you engage across the app system that used to be $2 and above that now we have received a commitment also that banks are willing, I shouldn’t say commitment, that banks would be willing to lower that to a dollar, below a dollar. Now, driving that is also that the Central Bank will, this is a fact that come the 1st of January that the Central Bank will no longer be taking 25 cents or 50 cents from those online charges, we are putting that at zero. So the Central Bank collects nothing further for electronic funds transfer, instant funds transfer. Why? Because we believe, as the evidence has shown, that it drives positive financial inclusion and therefore enhances financial stability mandate.”

One question posed to the Central Bank had to do with the enforcement of these new adjustments.  According to Governor Michael, the banks’ administrators cannot be forced to implement the changes.

For the banks that do decide to follow the new adjusted rates, Governor Michael says the banks could find other areas to make up for the monies being lost from these new fees.

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