Business

Lower commercial bank customer charges due to VAT reduction

Average monthly charges range from $2.49 per month to $14.66 per month for electronic delivery channels

Fees charged by local commercial banks decreased in June 2022 compared to six months prior, The Central Bank of The Bahamas (CBOB) revealed in its most recent analysis.

Analyzing scenarios for four groups of depositors – students, retirees, adult savings and adult checking – the CBOB found that based on the June 2022 fee structure, average monthly charges ranged from a low of $2.49 per month to a high of $14.66 per month for electronic delivery channels.

In December, that range was from $2.53 to $15.53 per month in average monthly charges for electronic delivery channels, according to the Commercial Bank Fees Cost Analysis survey for June 2022.

Students and retirees saw the lower range of charges at $2.49 and $3.56 respectively; while adult checking electronic delivery channels cost on average $14.66 a month and adult savings delivery channels cost on average $8.17 as of June.

Those fees were higher for physical or paper delivery channels, with costs ranging from $8.93 (retirees), to $22.65 (adult checking) as of June.

In December those costs were higher, ranging from $9.08 (retirees) to $23.02 (adult checking).

The CBOB said these reductions largely reflect the reduction of value-added tax (VAT) from 12 percent to ten percent on January 1.

There was also variance across commercial banks on fees charged, with CIBC FirstCaribbean International Bank (FCIB) having the lowest cost for physical transactions and the second 

lowest cost for digital delivery channels.

“In the constructed scenarios, each institution provides the lowest transaction costs to customers who chose to maximize the use of digital services for deposit account transactions. Overall, student account transactions were simulated as remaining the least costly at Commonwealth Bank Limited (CBL), with FirstCaribbean International Bank (Bahamas) Limited (FCIB) delivering the second lowest cost alternative, provided that customers relied optimally on digital services channels,” the Bank said.

“However, CBL does not issue ATM cards to student account holders, therefore the cost was significantly less than the other banks. Costs at FCIB were also the lowest when the same customer profiles relied most heavily on physical channels for transactions. Further, with regard to non-preferential adult clients, Bank of The Bahamas Limited (BOB) offered the lowest cost for customers operating a checking account who made use of digital delivery channels, while FCIB was the least costly for adults with a savings account.

“Fidelity Bank, however, maintained the advantage for both simulated checking and savings account services, when choosing physical services delivery. With regard to the higher end of costs, simulated customer profiles placed adults with both savings and checking accounts at Scotiabank as the costliest. This instance was observed for both clients that fully utilize the digital channels and a typical customer with significant reliance on physical transactions. RBC FINCO ranks at the upper end of costs for retirees and students who use digital channels and ranks second highest for physical services options levied towards standard adult savings accounts, while RBC ranked second highest for adult checking accounts.”

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Paige McCartney

Paige joined The Nassau Guardian in 2010 as a television news reporter and anchor. She has covered countless political and social events that have impacted the lives of Bahamians and changed the trajectory of The Bahamas. Paige started working as a business reporter in August 2016. Education: Palm Beach Atlantic University in 2006 with a BA in Radio and Television News

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