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Banxico blocks majority of requests to hike commissions on financial services

Mexico's central bank, Banco de México, has rejected more than two-thirds of requests from banks and other financial institutions to charge commissions on new financial products or hike commissions on existing ones during the last two years.

According to the central bank's annual report on the exercise of powers under the Law for the Transparency and Organization of Financial Services, which was released Dec. 16, financial institutions sought to increase commissions on 13,489 existing products in 2015; however, around 70% of those requests were rejected.

In the first 10 months of 2016, the central bank received requests to hike commission on 6,876 products, but 64.4% of those requests were rejected.

About 30% of the rejections in the last two years occurred because the requests were "inconsistent with the competitive behavior of the entities," the report said, adding that the remaining requests were rejected because of errors in the registration procedure.

As for commissions on new products, about the same percentage — around 70% — of requests from financial institutions were rejected in the same period.

Not only are Mexican banks finding it harder to get approval for new commissions, but their existing commissions are also coming under greater regulatory scrutiny. In this regard, as of Jan. 1, 2017, banks and other financial institutions will be obliged to reimburse users proportionally for annual commissions, such as credit card fees, charged on services that are subsequently cancelled by their clients.

Some 721 commissions charged on 495 products could be affected by this norm, Banxico noted.