Banks probe own tariffs

Mbongeni Mguni | Friday February 14, 2014 15:10

On Wednesday, Bankers Association of Botswana (BAB) CEO, Oabile Mabusa, said the study - initially scheduled to have taken place last year - would focus on gauging whether local tariffs are too high.

The BAB represents the country’s 11 commercial banks, which include the two newly licensed Indian banks.

The study, to commence in March, will compare the local tariff structure against regional countries, with the hired consultants making recommendations after the six-month probe.

“The background is that there has been public concern about the costs of banking services and we felt we must react responsibly as an industry and as part of that reaction, we are doing a study that will show or probe bank charges,” he told BusinessWeek in an interview.

“The study will look at whether the tariffs are too high, too low or just fine in comparison with other markets in the region. We expect to get some indication that Botswana is either outside of or within general trends as far as tariffs are concerned.” Mabusa added that the forthcoming study would also assess trends such as the contribution of non-interest income among banks. The CEO said the Association would map a way forward after receiving the study’s findings and recommendations.

“We cannot pre-empt our reaction,” he said.

“Our reaction will be informed by the industry assessment, findings and recommendations.”

He said while the study and its findings were currently for internal viewing, members could later decide to share with the public. The CEO added that the study should have taken place last year, but was postponed due to budget constraints.

The BAB’s tariff study comes in the wake of the Bank of Botswana’s moratorium on further increases to banking charges and fees, imposed earlier this year. The central bank’s decision was based on long running and widely held sentiments that rising bank charges and fees were not only an impediment to banking access, but also a disincentive to savings.