The Competition and Fair Trading Commission (CFTC) has described some fees levied on bank services as extreme, urging consumers to take note of these charges and make informed banking decisions.
The commission’s reaction follows growing concerns from consumers on bank charges which they deem exploitative and expensive.
In a written response to questions on Tuesday, CFTC spokesperson Innocent Helema said they have noted that some charges are excessive and do not reflect the cost of providing the services.
“This practice may border on unreasonable or unconscionable conduct which is prohibited under Section 43 of the Competition and Fair Trading Act,” he said, adding that some fees are not reversed once the service has been reversed.
Helema noted that consumers sometimes act irresponsibly by not paying attention to the fees, which are displayed in banking halls; hence, they are caught unawares.
He, however, said the commission has previously taken action against some commercial banks for unreasonable and unconscionable conduct in their fees structure
“We have been engaging banks on the development and we have carried out business clinics for commercial banks to sensitise them to their consumer protection obligations relating to the management of bank charges or fees,” said Helema.
Weighing in on this, Bankers Association of Malawi chief executive officer Lyness Nkungula said banks have different products and tariffs are not the same across the board.
She said customers should be free to shop around and opt for the banks that have affordable prices.
Last week, Consumers Association of Association of Malawi (Cama) expressed worry over the upward adjustments of fees for commercial bank services, saying it is key among reasons the majority of Malawians remain unbanked in the country.
Cama executive director John Kapito in an interview argued that commercial bank charges are prohibitive to most customers and have turned away a number of people from banking.
Published statements from FDH Bank plc, First Capital Bank, Standard Bank plc, NBS Bank plc and CDH Investment Bank indicated various adjustments on their services.
The banks have also hiked other services such as processing fees for personal loans, account closure fees, cash withdrawals, new cards and card replacements and commission on foreign notes sales and purchases, among others.
Results of a recent FinScope Malawi Survey showed that 67 percent of adults are unbanked largely due to prohibitive bank charges.
Disturbed by the high numbers of people outside the formal banking system, in 2017 the Ministry of Finance launched the 2016–2020 Strategy for Financial Inclusion, which provided direction to achieving and promoting inclusive finance in the country.