Banks told to become transparent

COMMERCIAL banks operating in Namibia should become more transparent about how their service fees are structured and they should develop products to accommodate clients at grassroots level, who form the majority of the population but have not been reached by banks so far, a parliamentary report recommends.

The report of the Parliamentary Standing Committee on Economics, Natural Resources and Public Administration, which investigated complaints about high bank charges, was tabled in the National Assembly last Thursday. The public hearings of the Committee followed a motion tabled a year ago by Kala Gertze of the Congress of Democrats (CoD) and the matter was referred to the Committee.”All banks should be requested to become more transparent in explaining to clients why certain fees are charged,” the report recommended.”Bank statements should become more user-friendly.Fee structures must also be readily displayed in the banks as well as on the back of bank statements,” the report noted.”It is necessary to train bank staff to propose the right products to the right clients, as customer service is one of the cornerstones of a good business and this is very important,” the Committee, which is chaired by Dr Hage Geingob, recommended.”More banks with competitive fee structures should be allowed to operate in Namibia to enlarge the playing field and to give clients a bigger range of products.”To establish the broader competition base, the Finance Ministry should expedite the amendment of the Banking Institutions Act.The Parliamentary body expressed its disappointment that the Competition Commission was not yet operative.According to the Competition Act of 2003, the Ministry of Trade and Industry is the only body that can refer any matters regarding the provision of competitive processes and services to that Commission.”It was however difficult to secure an input from the Trade Ministry,” the report noted, and urged that the Commission should be activated.Once operative, the body should investigate the fee structures of banks and recommend how to change relevant laws to make the situation more favourable for clients and banks alike.The Competition Commission is not yet operational because the necessary regulations and guidelines have not been completed, The Namibian has learnt.Once the lengthy process was completed, the body would be up and running, a source close to the Ministry said.Banks should conduct proper market research to determine the needs of clients, especially those of low-income groups and small and medium enterprises (SMEs), the parliamentary report recommended.Banks in Namibia, most of which are subsidiaries of South African banks, should be obliged to make all management decisions pertaining to transactions initiated by Namibian clients in Namibia, rather than it being done by their holding companies in South Africa, as is the case now.The Committee emphasised that the Ministry of Trade should study the recent report on high bank charges compiled by the South African Competition Commission to “see if any recommendations can be applied in Namibia.Lastly, the Committee stated that there was a need to establish an independent Credit Bureau, which would provide a domestic credit information system to report on clients who defaulted on payments as well as those who honoured them.The public hearings of the Committee followed a motion tabled a year ago by Kala Gertze of the Congress of Democrats (CoD) and the matter was referred to the Committee.”All banks should be requested to become more transparent in explaining to clients why certain fees are charged,” the report recommended.”Bank statements should become more user-friendly.Fee structures must also be readily displayed in the banks as well as on the back of bank statements,” the report noted.”It is necessary to train bank staff to propose the right products to the right clients, as customer service is one of the cornerstones of a good business and this is very important,” the Committee, which is chaired by Dr Hage Geingob, recommended.”More banks with competitive fee structures should be allowed to operate in Namibia to enlarge the playing field and to give clients a bigger range of products.”To establish the broader competition base, the Finance Ministry should expedite the amendment of the Banking Institutions Act.The Parliamentary body expressed its disappointment that the Competition Commission was not yet operative.According to the Competition Act of 2003, the Ministry of Trade and Industry is the only body that can refer any matters regarding the provision of competitive processes and services to that Commission.”It was however difficult to secure an input from the Trade Ministry,” the report noted, and urged that the Commission should be activated.Once operative, the body should investigate the fee structures of banks and recommend how to change relevant laws to make the situation more favourable for clients and banks alike.The Competition Commission is not yet operational because the necessary regulations and guidelines have not been completed, The Namibian has learnt.Once the lengthy process was completed, the body would be up and running, a source close to the Ministry said.Banks should conduct proper market research to determine the needs of clients, especially those of low-income groups and small and medium enterprises (SMEs), the parliamentary report recommended.Banks in Namibia, most of which are subsidiaries of South African banks, should be obliged to make all management decisions pertaining to transactions initiated by Namibian clients in Namibia, rather than it being done by their holding companies in South Africa, as is the case now.The Committee emphasised that the Ministry of Trade should study the recent report on high bank charges compiled by the South African Competition Commission to “see if any recommendations can be applied in Namibia.Lastly, the Committee stated that there was a need to establish an independent Credit Bureau, which would provide a domestic credit information system to report on clients who defaulted on payments as well as those who honoured them.