Govt Urges Banks To Review "Exorbitant" Fees
Local banks are reportedly fleecing depositors through high bank fees and exorbitant withdrawal fees of about 3% of the amount being withdrawn from 1% charged a few months ago.
Depositors are also being charged about 2.5% for withdrawals done on Automated Teller Machines.
The government is concerned that this would discourage people from making bank deposits and has warned financial institutions against the practice.
Business Times quoted the permanent secretary in the Ministry of Finance, Economic Development and Investment Promotion, George Guvamatanga, as saying:
Banks please, your charges [are exorbitant]. Someone commented that we no longer have banks in this country but we now have real estate companies masquerading as banks
Banks are collecting rent from customers every month.
[Banks now say], you have an account where you pay me a rental of U$25 every month and or US$20 every month.
When you withdraw US$100 000 for example, there is a 2% -3% commission, and other charges, you walk away from the bank with US$97 000 so the question is are we encouraging depositors to bank their money?
There is always an argument that there are different accounts, there is a deposit account, and savings account but look at ways of encouraging the depositors to have their money in those accounts which do not attract this US$25 or US$15.
Guvamatanga demanded that banks slash their charges and desist from “robbing” depositors. He said:
I think the other place where there is almost robbery is with your own Visa and Master cards, those foreign cards.
You deposit your money and you attract a commission for depositing your cash.
I pledge with you to sit down within the remaining two weeks of this year and when you come back in January 2024, whilst still in office so that when you come back your charges should encourage people to put their money into the bank.
Banks are the biggest problem as far as confidence is concerned because they are all focusing on this non-funded income instead of the core business that you lend and you get interest.
I was looking at the financial results [banks], and most are now at 60%/70% non-funded income.
I know they (banks) have restructured their businesses with a 70% non-funded income that’s not achievable anywhere in the world.
It shows that the cost of banking in this country is just too high. It’s something we have not spoken about. I hope banks will look at it and make adjustments.
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