The term "practice direction" may sound harmless enough - but it's a firm directive from the Central Bank - as regulator - to commercial banks and financial institutions. So when Practice Direction Number 7 was announced recently, we took note.
That directive limits the fees and charges banks can charge you to use your own money - such as an ATM - which the Belize Bank charges its own customers 50 cents to use per transaction.
The governor of the Central Bank, Kareem Michael explained it 8 days ago:
Kareem Michael, Governor, Central Bank
"With effect second January, 2024, the central bank will require domestic banks to limit and desist from imposing the following fees and charges. 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. I would be as transparent as I possibly can: the end objective of the central bank is to have this as zero for own-network, own-account usage."
"But if practice direction isn't followed on the 2nd of January, all things considered, are things remaining the same, then there is recourse that the central bank can take action that the central bank can take."
Well, before they can take any recourse, the Belize Bank is taking them to court. Attorney for the Ashcroft Alliance, Godfrey Smith today wrote to the Governor of the Central Bank saying that the Belize Bank has "serious concerns" with Practice Direction No. 7. They say, quote, "Despite opportunity to engage with BBL and other affected financial institutions, the CBB has refused meaningfully to do so, and these concerns persist," end quote.
So, the Belize Bank has filed an application for Judicial Review of Practice Direction Number 7. The bank is also asking for an injunction against implementation of the directive on January second, 2024.
Smith also says that he expects the bank will, quote, "not now proceed with the full implementation of PD7 pending determination by the Court." End quote. So far, there has been no indication from the bank.
So, what's the bottom line for you? Well, those pro-depositor measures the bank had directed - including the lowering of the 50 cent per transaction fee that the Belize Bank imposes - may be put on hold. But, we say "may be" - because the Bank has not gotten an urgent hearing approved by the high court - not yet at least. We'll keep following it.
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