Back in 2006, the Bank Enquiry Panel was established by the Competition Commission to look into bank fees / charges and give some recommendations. You should be pleased to hear / read that the tedious work has now been completed and the report is out, read Statement on Banking Enquiry Report by the Competition Commission.
If you, like me, have been wondering what this is all about and what sort of recommendation they’ll come up with you might want to read the Executive Overview released by the Competition Commission. OR you could read the rest of this article for points I found interesting while reading.
What is the Banking Enquiry about?
The important thing to note about the enquiry is that it is meant to initiate and inform a debate promoting accessible, affordable and good quality banking services.
The report will provide us with a number of proposals, which government is committed to consider when drafting policy for the competition commission as a response.
The Banking Enquiry report is intended to advise the Competition Commissioner on competition issues in retail banking in South Africa.
Right, now let’s look at some of the interesting recommendations shall we?
Debit Orders
- A max of R5 per dishonoured item like bounced debit-orders. However if a bank incurs additional expenses because of your defaulting can close your account and/or sue you for the damages. See recommendation no. 1.
- Consumers should be allowed to cancel any direct debit instruction at any time by phone, internet, or over the counter at a branch (subject to written confirmation by the customer where necessary). But you would still need to pay those debtors! See recommendation no. 2.
ATM Charges
- The owner of the ATM you withdraw from must set their own charge for dispensing he cash. It is called “direct charging model”, woooo! See recommendation no. 3.
- In such a case where you withdraw from a different ATM other than your bank. Your bank will have to charge you separately and directly for an “off-us” service charge. See recommendation no. 4.
- Oh banks shouldn’t be allowed to discriminate and charge other banks’ customers more for the cash despising service. See recommendation no. 5.
Switching made easy!
- There should be a centralised banking fee calculator service. You would be able to input your requirements once and get an objective indication of which bank can help you and the charges. This will ease comparative shopping indeed! See recommendation no. 23.
- Banks should also be allowed to advertise comparing their offering, including price, to competitors’. See recommendation no. 24.
- When you switch accounts, your bank should provide the new bank with information on standing orders and direct debits within a specified period of time of receiving the request to do so. Furthermore your bank should specify how the balance on the account, standing orders and direct debits, net of any charges and interest but including any interest due, will be transferred from the old bank directly to the new bank, and how and when the account with the old bank will be closed. See recommendation no. 26.
The bane of our lives, FICA!
- The national treasury should investigating establishment of a central FICA hub. This would help us all and spare us the duplication that goes on. See recommendation no. 27.
What’s Next?
The Commissioner will now consider the report and consult with various stakeholders and government departments before making decisions regarding any further action arising from the report.
I would love to hear your thoughts regarding this, do post your comments here.
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