RBM should remove the log in its eyes

Being one of the customers of commercial banks in the country who cries for good customer service, Reserve Bank of Malawi (RBM) deputy governor (economic services) Naomi Ngwira only rubbed salt into the wound when she spoke about banks’ failure to give customers a better deal.

When you hear a regulator such as RBM going to town on the regulated and in public, you know that there is a problem. It is a reflection of failure on the part of the regulator to balance the interests of the regulated and the served.

Briefly, this is what the RBM deputy governor said last week: “I still go to banking halls to see how banks are conducting themselves and I can tell you that very few banks are customer-oriented. It’s only that customers are lenient, there should have been demonstrations against certain banks.”

The Reserve Bank of Malawi Act, the law establishing the central bank, talks about RBM appointing “inspectors who may at any time investigate the affairs of a bank or other financial institutions at their premises.”

If the inspectors were not snoring on the job, I would expect the regulator, besides faulting the banks for poor service, to have spelt out penalties given to some of the institutions under its constituency to ensure adherence to best practices.

In the absence of such action, the RBM’s concern made to stakeholders in Mangochi last Friday sounds similar to the Biblical tale of one pushing to remove a speck of sawdust from a brother’s eye ignoring the plank in one’s own eye. Put simply, it smacks of hypocrisy!

That most of the commercial banks lack customer service is not news. What will make headlines is when RBM, through its Bank Supervision Department, punishes culprits who fail to meet minimum expectations.

For example, I am told entry and exit doors in commercial banks are supposed to have a system that allows a minute’s delay. Some banks have complied with this requirement and fitted electronic doors. However, there are others, at least in Blantyre, where a customer freely walks in and out as if they were entering a supermarket because their control gadgets broke down way back. In some cases, due to faulty airconditioning systems, some banks leave their doors ajar.

I am not sure if RBM inspectors have been to Blantyre central business district (CBD), along Victoria Avenue (the so-called Malawi’s Wall Street), where commercial banks have “bought” virtually three-quarters of the parking spaces for their executives, leaving their customers scrambling for the few available. This is a cheeky message to the customer that they matter less.

Many commercial banks also stop customers from taking phone calls within banking halls, yet they keep customers waiting for hours on end without being served. Security or otherwise, I feel banks can only have the moral high ground to stop customers from taking calls if they improve on the time they take to serve them.

If people spend four hours to deposit or withdraw money from their bank accounts, how big is the temptation to keep the money home, outside the financial system?

Through this column, I have celebrated some of the best customer services on offer in some banks. This is a reflection that in many cases, the problem boils down to individuals other than institutions. Kudos to the few outstanding bankers out there.

RBM should dispatch its inspectors to automated teller machines (ATMs) around major towns to appreciate the torture customers go through. It is common to find only one out of a couple ATMs working, creating otherwise avoidable long queues.

Some bankers have argued that mobile and Internet banking are alternatives to beating the queues. However, the new innovations, in many cases, have frustrated customers even more. Some have had their water or electricity supply disconnected after paying through such platforms, for example.

For RBM to suggest a rebellion in form of demonstrations from frustrated bank customers is going overboard. What is required is for the central bank to put its house in order and replace the milk teeth it seems to have with ‘biting teeth’ required of a regulator. RBM can draw some lessons from the Malawi Communications Regulatory Authority (Macra) on how it deals with players in its sector.