Photo: Kareem Michaell, Governor, Central Bank
of Belize

by Marco Lopez

BELIZE CITY, Thurs. Sept 7, 2022

The Central Bank of Belize is poised to implement a practice direction for commercial banks to address the issue of excessive transaction fees paid by customers. Come December 2023, commercial banks will be mandated to follow new rules as they relate to the fees depositors must pay to access cash and services. In a press conference yesterday, Central Bank Governor, Kareem Michael said they deem the fees unfair and excessive in many cases.

“This issue we are having is that a depositor, across every point of access at a commercial bank, is charged for that bank to keep his money. That, I think, stretches any sort of fairness boundaries, or consumer financial protection ideas that we may have. If you go to an ATM you are charged; if you say, ‘bwai, mek I try run fu over the counter,’ da $2. Then, if you do it online, you are looking at between $2 and $11 depending on the type of transaction that you are doing,” Michael said.

He pointed out that this is not a practice that he thinks the Central Bank should “sit by and allow.” The regulator wants to encourage the use of online transactions, but the current fee structures penalize the use of online banking with exorbitant charges, making the route of getting cash at the ATM still the best option.

“If that pricing had made sense, in a way where we structured it to drive people to less use of cash and more online, then maybe the Central Bank would have taken a step back and listened to whatever appeal or objection the Bankers’ Associations would have had. But for right now, that pricing doesn’t make sense because the cheapest form of access is going to an ATM at 50 cents and pulling out your money,” Michael pointed out.

About 5 years ago, the Central Bank launched an initiative to increase the use of digital payments across the financial system. Michael shared that over the period, the value of these transactions online has been “astronomical.”

“The value of these transactions online tops 30 billion Belize dollars over the past 5 years,” Michael said.

He mentioned in his presentation that some of the commercial banks were ‘reluctant’ to make the necessary investments.

The practice direction, which seeks to address the excessive fees paid by customers, should lessen that burden. The hope of the Central Bank seems to be to lessen the use of cash within the financial system by reducing the cost of utilizing the other financial access points.