Bermuda's two main banks are to be hit with a $500,000 annual hike in Government fees.

MPs yesterday passed The Banks and Deposit Companies (Fees) Amendment Act 2001 which brought in the first fee rise in six years.

Finance Minister Eugene Cox said the financial sector had seen significant growth since 1995 and the money was needed to help pay Government costs for supervising the industry.

But Shadow Finance Minister Grant Gibbons said the move was a money spinner for the Government to recoup money blown on building projects in this year's Budget.

He said the role of supervising the banks needed to be independent of politics and it should be the Bermuda Monetary Authority who carry out that role.

And he said he thought there was a tacit agreement from Government that they would keep their fees flat to allow the BMA more room to raise their fees if they needed to.

He said: "What we are seeing is you're asking for a big chunk tonight and then the BMA can come back and take another big chunk.'' Opposition MP Allan Marshall said he feared the half million rise paid by Bermuda's two main banks from a previous $1 million a year fee would be passed on to the customer while shareholders might get lower dividends.