BDL bans fee deduction as banks accused of charging 'fresh accounts'

The Central Bank has issued a circular preventing banks from deducting new fees from bank accounts created prior to October 2019.

The Bank also asked commercial banks to disclose accurate information about the “real cost” and mechanism of any fees imposed on clients, warning that the Central Bank’s Banking Control Commission will oversee the implementation of the circular and will penalize any violating banks.

“The banks received the circular with a lot of dismay, but they are almost certain that the Banking Control Commission might not be strict in enforcing the circular, seeing as it comprises members who are in collusion with the banks,” highly informed sources told the Nidaa al-Watan newspaper in remarks published Wednesday.

“The banks stress that they need these fees for spending on the implementation of Circular 158 and on their operational costs,” the sources said, revealing that “some banks have started deducting from fresh accounts (opened after October 2019) to cover their expenses.”

“The Control Commission know this and there is a report in this regard before the Central Council, but there is tight confidentiality, because revealing these violations to the public would undermine confidence in fresh accounts and their beneficiaries would scramble to withdraw the deposits,” the sources added.

The sources also noted that, should it be implemented, the new circular will put certain banks on the brink of declaring their bankruptcy and will push others to lay out employees en masse, shut down additional branches and scale down operations to the lowest possible level.