Charles Frank, CCBE Bank Enquiry Manager, speaking to BuaNews yesterday said the question of how banks actually arrive at their prospective charges will be up for scrutiny.
Frank believes the public enquiry has already had positive effects on fees being charged by financial institutions, and says the CCBE will continue to promote a transparent and a more consumer friendly banking environment.
The public hearings have focused mainly on ATM fees, payment cards and interchange fees, the National Payment System and Monday's theme of pricing behaviour and market power. Yesterday, Standard Bank came under the microscope followed by Visa International.
Dr Penelope Hawkins from FEASibility, an economic research company, said in her 2006 report to the CCBE that a public enquiry into bank charges and aspects of competition was necessary "due to continued public concern regarding the level of [bank] charges."
The public enquiry commenced on 20 April 2006 within a five-stage framework aimed at investigating the lack of transparency and communication within financial institutions with regard to charges and competition. The second public hearing kicked off yesterday in the capital under the theme of "pricing behaviour and market power." The South African Competition Economics Forum (SACEF) concluded following a meeting in March 2004 that the question of access to finance and competition in the banking sector needed to be explored.
SACEF participated in the National Treasury Task Team on competition in banking and found that "customers need more transparent information on bank charges to aid them in comparing charges between banks, and that switching costs should be reduced. "Penalty fees, charges for essential services or charges for services [were] not open to competition [and] should be on a cost-plus basis and open to regulatory oversight."
The Constitution makes provision for the CCBE and the hearings are being conducted in terms of Section 21 of the Competition Act No 89 of 1998. (BuaNews)
