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Court injunction halts implementation of reduced fees and charges for banks

Posted: Wednesday, January 3, 2024. 2:49 pm CST.

By Aaron Humes: The Belize Bank Limited is applying for judicial review of Practice Direction Number 7 of 2023, intended by the Central Bank of Belize as the financial regulator to restrict fees and charges in the domestic banking sector and prescribe any attendant penalties should those to whom it applies fail to comply with its terms.

On Tuesday before High Court Justice Nadine Nabie, Senior Counsel Godfrey Smith and attorney Hector Guerra asked for and received an interim injunction barring the Central Bank from enforcing the regulation until the full application is heard on February 12. The Central Bank is represented by attorney Yohhahnseh Cave.

A practice direction from the Central Bank carries the force of law to commercial banks and financial institutions. In announcing the move in December at a press briefing, Governor of the Central Bank, Kareem Michael explained: “With effect 2 January 2024, … All banks must reduce or limit ATM withdraw fees to a maximum of $0.25 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.”

Governor Michael projected that “the end objective of the Central Bank is to have this as zero for own-network, own-account usage” – that is, no fees paid at all.

But Senior Counsel Smith wrote to the Governor last week saying that the Belize Bank has “serious concerns” with Practice Direction No. 7. They further add that “Despite [an] opportunity to engage with BBL and other affected financial institutions, the CBB has refused meaningfully to do so, and these concerns persist.”

According to KREM News, Heritage Bank’s transfer fees were reportedly drastically reduced even before the start of the New Year; their managing director Stephen Duncan told KREM on Tuesday that they are reviewing their position in light of the injunction. There was no word from the third major bank, Atlantic Bank, on where it stood.

 

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