by Kristen Ku
BELIZE CITY, Wed. Jan. 3, 2024
On Tuesday, January 2, the High Court of Belize awarded Belize Bank an interim injunction to put a temporary halt to the Central Bank of Belize’s (CBB) enforcement of Practice Direction No. 7 of 2023, which was set to significantly lower banking fees across the sector.
The directive, announced in December 2023 by the Central Bank, is aimed at capping or even eliminating various banking fees, such as service charges, ATM withdrawal fees, and money transfer fees.
The injunction, effective immediately, will stay in place until the resolution of Belize Bank’s application for a judicial review, which is scheduled to take place on February 12, 2024. Justice Nadine Nabie will be presiding over those proceedings.
Senior Counsel Godfrey Smith is representing the Belize Bank, while the Central Bank’s attorney is Yohhahnseh Cave.
In their announcement back in December, the CBB explained that it had made a decision to stop charging local banks for electronic and instant funds transfers on online apps, and that as a result it expected certain fees that local banks charge their customers to fall below $1.00, come January 2.
Heritage Bank, another major player in Belize’s banking sector, had reportedly reduced its transfer fees drastically over the New Year weekend.
However, in light of the recent court ruling, the Managing Director of Heritage Bank informed KREM News that they are reassessing their position regarding the fee reductions.
Belize Bank, however, in a press release issued today, noted that their opposition to the CBB’s Practice Direction stems from concerns about stifling competition, limiting product innovation, and harming consumers, especially in remote areas of Belize.
Filippo Alario, Executive Chairman of Belize Bank, explained that without certain fees, they would need to reassess their ATM network strategy, potentially reducing ATM services in economically unfeasible areas.
The press release also highlighted that the fees in question are essential for banks to support critical functions like cyber-security, financial crimes and anti-money laundering compliance, and maintaining digital and physical infrastructure.
It cited the example of its digital wallet, “E-kyash,” which enables cheap and easy electronic payments from mobile phones.
Despite suggesting immediately reducing ATM withdrawal fees while working to create financial products for remote and financially disadvantaged sections of society, the Belize Bank release said that these proposals were rejected by the CBB, which proceeded to implement its price controls.
Belize Bank argues that the best way to lower charges is through competition between financial institutions in the open market, rather than through the imposition of price controls.
We reached out to the Governor of the CBB, Kareem Michael, for comment regarding the situation, but he denied an interview as they await the court’s hearing. “I must try to refrain from interviews until the hearing,” he stated.
However, he pointed us to the CBB’s press release issued on Wednesday, January 3, which clarified that due to Belize Bank’s interim injunction, they are unable to move forward with their directive amongst all local banks. “The Central Bank is prevented from implementing PD No. 7 until the court has made its determination,” it read.
(AMANDALA Ed. Note: What a difference: partly Belizean owned Heritage Bank had already “reduced its transfer fees over the New Year weekend”; but Ashcroft’s Belize Bank loves Belizeans so much, it is concerned about “stifling competition, limiting product innovation, and harming consumers, especially in remote areas of Belize,” so to save us from the Central Bank’s evil “Practice Direction”, it has filed an Injunction to stop it.)