Bank of Botswana (BoB) Governor has once again reminded commercial banks that there is a growing concern over their exorbitant charges while the same is not linked to the quality of service they provide to clients.
Linah Mohohlo, who was recently appointed to the Bretton-Wood Committee, was speaking at the official launch of State Bank of India in Botswana this week. The Governor has lately made public her displeasure about local banking industry players’ tendency to levy high tariffs on clients, which could inhibit access to banking services. “It is a matter of serious concern that in a number of instances, the quality of service does not warrant the exorbitant charges levied by banks,” fumed Mohohlo, who was the guest speaker at event.
The Governor’s displeasure about high charges from well-heeled commercial banks comes barely months after Vice President Ponatshego Kedikilwe made the same observation when opening First National Bank Botswana (FNBB) state-of-the-art headquarters at Central Business District (CBD). A senior banker at a top local bank recently told Botswana Guardian that ‘it is surprising that she (Mohohlo) is concerned that charges are high, while they are approved by the central bank itself.” The central bank, or Mohohlo herself have not stated publicly what measures they will introduce to curb excessive charges from banks, which are largely foreign owned. Mohohlo, who was accompanied by her two deputy governors Oduetse Motshidisi and Moses Pelaelo also urged banks to do more in ensuring their staff are trained to the highest standard, which in turn could improve services rendered to customers.
She also cited a recent report of the KPMG Banking Industry Satisfaction study, which also cited the need for banks to work on customer satisfaction, not ‘just access to finance’. Mohohlo, who has been with the central bank since its inception, said that there is a growing concern that in bid to cover internal inefficiencies, banks extend high charges to customers. High bonuses, which are paid to staff and bank executives, which are linked to short term profits might be a possible reason banks charges high tariffs said Mohohlo. She wondered if the above scenario prevails in the local industry as reported in countries such as the United States of America and United Kingdom during the economic recession. Almost pleading with banks, which strangely she regulates, Mohohlo said: “Let’s agree that we continue to review the charges levied so that we encourage, rather than discourage, access to banking, which we all know, is no longer a luxury but a necessity.” Total banking sector assets stood at P58.3 billion in December 2012, representing a 12.5 percent increase from P51.8 billion in December 2011 driven by growth in loans and advances.
Speaking moments after Mohohlo, State Bank of India (Botswana) Managing Director said historically (as a bank) they are not profit driven. “We will ensure charges are minimal,” Sophy Matthew later told Botswana Guardian. She could not immediately state how they will sustain their ‘not for profit’ crusade considering the operational and related banking costs they are expected to incur. Mohohlo said that the local banks’ resilience during the recent recession shows that the central bank is doing a good work in regulating and supervising the industry.