Reserve Bank of Malawi (RBM) has relieved thousands of commercial banks customers, who are charged a number of fees on their accounts, by scrapping off ledger fees on savings accounts effective January 1 2017.
Already, the move has sent shock waves in the banking sector with the Bankers Association of Malawi (BAM) fearing the measure could heavily impact on revenues the financial institutions earn.
But Consumers Association of Malawi (Cama) has applauded the central bank for the bold move to protect consumers, urging it to ensure that all charges levied on customers’ accounts are revisited.
This means that holders of savings accounts, which were debited ledger fees —an amount of money that banks charge as a monthly sum for maintaining an account—will smile all the way to the bank since money ranging from K300 to K500 will be not deducted every month.
While this is a relief to thousands of savings account holders, there is a mismatch in policy in that a saver’s deposit rate—at a paltry seven percent—creates a negative savings scenario when compared to the galloping inflation rate at 20.1 percent as of October 2016, according to the National Statistical Office (NS0).
To illustrate how much millions of kwacha savers will accrue every month, a bank agency in Blantyre with 18 000 customers and charges ledger fees of K500, will forgo K9 million. This means the figure could run into billions of kwacha every month when all the savings accounts of 10 commercial banks are taken into account.
RBM spokesperson Mbane Ngwira on Monday said the directive is one of the tools to enhance financial inclusion.
He said: “This issue is more than just a ledger fees cut; we are looking at it from the financial inclusion position. What we would want to see is that if an account is a savings, it should act as a savings account where if you deposit money, you should be able to get the money with interest at the end of the month.
“On the same, if one is a holder of transaction account, it should reflect that the account is only being used for transactions and it should be charged for transactions only.”
Cama executive director John Kapito has summed it all by applauding RBM for stepping up to protect consumers.
He said: “What RBM should do is to take the whole build up of bank charges other than dealing with one at a time because the whole structure of these charges does not make sense.” n