The Be­lize Bank is de­fend­ing its po­si­tion to seek an in­junc­tion against the Cen­tral Bank of Be­lize (CBB) over its plans to im­ple­ment a new reg­u­la­tion aimed at re­strict­ing fees and charges levied by do­mes­tic banks.

Ear­li­er this week, the Supreme Court of Be­lize grant­ed the Be­lize Bank an in­junc­tion tem­porar­i­ly block­ing the CBB from im­ple­ment­ing Prac­tice Di­rec­tion No. 7 of 2023.

The in­junc­tion will re­main in ef­fect un­til the court de­ter­mines the out­come of the Be­lize Bank’s ap­pli­ca­tion for ju­di­cial re­view of the CBB’s. A hear­ing for the ju­di­cial re­view is sched­uled for Feb­ru­ary 12, be­fore Jus­tice Na­dine Na­bie.

The new Prac­tice Di­rec­tion, an­nounced by the CBB in De­cem­ber 2023, sought to cap or elim­i­nate var­i­ous bank fees, in­clud­ing ser­vice charges, ATM with­draw­al fees, and trans­fer fees.

In a state­ment, the Be­lize Bank said that on No­vem­ber 16, last year the Be­lize Bankers’ As­so­ci­a­tion (BBA) wrote to the CBB ex­press­ing, “its dis­ap­point­ment… with the de­ci­sion to main­tain its po­si­tion on em­ploy­ing price con­trol mea­sures”, be­cause it re­gard­ed them as coun­ter­pro­duc­tive and a dis­in­cen­tive to in­no­va­tion.

The Be­lize Bank said it aligns it­self with the BBA’s po­si­tion and that it op­pos­es the CBB’s po­si­tion be­cause price con­trols sti­fle com­pe­ti­tion, lim­it prod­uct in­no­va­tion, and ul­ti­mate­ly harm con­sumers by erod­ing fi­nan­cial in­clu­sion and ac­cess to fi­nan­cial ser­vices, es­pe­cial­ly in re­mote ar­eas of Be­lize.

Be­lize Bank’s ex­ec­u­tive chair­man, Fil­ip­po Alario, said that the Be­lizean pub­lic de­serves price trans­paren­cy.

“With­out ATM with­draw­al fees and some of the oth­er charges the CBB is pro­hibit­ing, we would need to re­assess our ATM net­work strat­e­gy which will in­clude re­duc­ing cer­tain ATM ser­vices from the mar­ket in ar­eas where the cost of their op­er­a­tion would be eco­nom­i­cal­ly un­fea­si­ble”.

Alario said that oth­er fees and charges in ques­tion are es­sen­tial for banks to sup­port crit­i­cal func­tions, in­clud­ing mount­ing costs of cy­ber­se­cu­ri­ty, fi­nan­cial crimes and an­ti-mon­ey laun­der­ing com­pli­ance, as well as the up­keep of both dig­i­tal and phys­i­cal in­fra­struc­ture.

“These fi­nan­cial com­po­nents al­so play a vi­tal role in dri­ving in­no­va­tion, ex­em­pli­fied by ini­tia­tives such as our dig­i­tal wal­let, “E-kyash”, which en­ables cus­tomers to make elec­tron­ic pay­ments eas­i­ly and cheap­ly from their mo­bile phones”.

Be­lize Bank said that all the banks here have made in­di­vid­ual pro­pos­als to re­duce fees sig­nif­i­cant­ly in line with their own strate­gic ob­jec­tives but the CBB has re­ject­ed these and pro­ceed­ed to leg­is­late its own price con­trols.

It re­called that in a let­ter to the CBB on No­vem­ber 7, last year, it pro­posed re­duc­ing ATM with­draw­al fees im­me­di­ate­ly and to pro­gres­sive­ly work to cre­ate fi­nan­cial prod­ucts for the ge­o­graph­i­cal­ly re­mote and fi­nan­cial­ly dis­ad­van­taged sec­tions of so­ci­ety.

The Be­lize Bank wel­comed the in­junc­tion grant­ed by the Court on Tues­day re­it­er­at­ing that the CBB is not per­mit­ted to en­force its Prac­tice Di­rec­tion be­fore the out­come of its ap­pli­ca­tion is de­ter­mined.

“More­over, de­spite the sug­ges­tion to the con­trary in the CBB’s press re­lease of Jan­u­ary 3, 2024, Be­lize Bank has al­ready passed on­to its cus­tomers the ben­e­fit of the CBB’s elim­i­na­tion of its fees to the do­mes­tic banks for in­stant funds trans­fers.

“The elim­i­na­tion of these charges by the CBB to the do­mes­tic banks is an in­de­pen­dent mat­ter and not part of the price con­trols which the CBB wish­es to in­tro­duce pur­suant to its Prac­tice Di­rec­tion,” the Be­lize Bank added. (CMC)