New licensing fees for banks are "fair and reasonable'' in light of banks' profits, Finance Minister the Hon. Dr. David Saul said Wednesday.

But while the Island's major banks will be paying $1 million for a license, smaller banks, such as the Bermuda Commercial Bank will pay between $100,000 and $150,000.

Dr. Saul's comments came following the introduction of the Banks and Deposit Companies (Fees) Amendment Act 1995 before the House of Assembly.

His Opposition counterpart, Sandys North MP Mr. Eugene Cox agreed the new fees were "not unfair,'' representing three percent of banks' profits and one percent of assets.

But he called for tighter supervisory controls by the Bermuda Monetary Authority over banks in light of the recent collapse of Barings Bank.

Dr. Saul replied that international agreements already supervise banks and financial institutions but Government banking supervision cannot prevent criminal activity by an employee within a bank.

Tighter internal controls by the banks, not Government supervision was necessary, he said, adding that the Bermuda Monetary Authority could act as a "conscience'' for the banks.

This, he claimed, would prevent the same happening in Bermuda.

Mr. Cox also warned the new licensing fees would be handed down to customers.

Already, he said, interest rates were going up.

"The banks are effectively a monopoly because they are not regulated,'' he said.

Dr. Saul pointed out that mortgage interest rates remain the same as last year, meaning Bermudians have access to mortgage money for longer periods than they ever dreamed of.