Banking is an industry and art that is solely meant to make profits and progress to sustain and have a competitive edge over its competitors.
It is an industry that dwells on service and not just service rather most dedicated service delivery to maintain and retain its clientele in this resilient time when there is on influx of banks and customers are never loyal to one bank.
Most of the clientele has always blamed banks for ripping them off through the monthly ledger fees that are collected and other add-on fees depending on services provided and attached to the type of account.
However, all these surmountable costs are used to carter for so many service-related costs which the customers hardly consider and think about.
Come to think of how automated teller machines (ATM) cards, cheque books are produced and their costs.
All these are costs that have to be borne to maintain the account; hence, the ledger charges on such.
However, the central bank has thought otherwise and made a bold move that effective January 1 2017, all commercial banks will no longer charge the monthly ledger fees on all savings accounts.
This, to the rest of the commercial banks, is nip to the bud as it translates to the fact that banks will have to find an alternative revenue source to cater for the maintenance of such savings accounts which are likely to tremendously grow.
It does not only impact on the maintenance costs for the banks, but also the profit margins and overall performance of banks will also be affected.
This may trickle to so many avenues, including the welfare and bonuses base for employees of the banks on your street.
Figure out a situation where a commercial bank charges K375 as a monthly ledger fee and maybe has a clientele base of about 30 000. This translates to MK 11.2 million. For 12 months or one year, it amounts to revenue that is mostly likely to cater for other related costs.
Most customers seemingly think less of other related costs which banks incur. There are, for example, overdrawn and dormant accounts that have to be closed and such an exercise is not easy, but rather daunting.
Updating of accounts is also yet another task that remains costly.
All these translate to a lot of revenue that has to be catered for.
In essence, it means that other commercial banks will have to raise tariffs for some products and services as one of the ways to cushion and mitigate for such a cost.
On a lighter note, this is positive news to the customers as they will not have to be charged for the monthly ledger fees which are sometimes regarded as a rip-off and not making sense at all.
But the onus now is on the customers to take advantage of this cut and extensively save as the account name connotes.
Not many banked Malawians know what it means to have a savings account. In a nutshell, this is an account that is purely for savings, no ATM cards and unnecessary withdrawals. Just savings.
Yet this is totally contrary to how most Malawians use this type of account. It seems many people in the country are not keen to save.
They use this special account as a conduit for receiving and withdrawing money. No savings remain.
This cut on charges might seem rosy for customers, but it will yield nothing if we, as customers and Malawians, do not embrace the culture and attributes that really define savings. n