A recent research by the South African Competition Commission (SACC) has revealed that major banks in Southern Africa are milking off customers through unjustifiable chunks of high charges. An African Business article about the same research further reports that these banks use complex fee structures to abuse their market power.
The inquiry has also found out that there is a distinct lack of competition in the sector and that bank charges are higher than they would be at competitive levels. It has further found out that banks use “information asymmetries and product complexities” to abuse their power.
This comes as no surprise to me. For some time, I have had a feeling that these banks are ripping us off. They have numerous charges most of which we do not even notice. No wonder they make astronomic profits which are not at par with the prevailing economic environment in the region. I, for one, regard banking as a secondary industry. If all of us can agree to keep our monies at home, these banks would be closed down.Therefore, it always pains me when the primary industries such production, agriculture, construction etc are either making marginal profits or registering a string of annual losses up to the point of being closed down while the banking industry makes up to 200% annual profits. And then one banker comes in to say:
most commercial banks in the country are making profits because of their good management and are innovative.
I beg to differ with this fellow.If this was the case, why is it that some equally brilliant managers in other industries fail to register such kinds of profits? And why is it that some of the so called innovative bank managers fail to register the same astronomic profits in these other industries after a series of “successful years” in the banking industry.It is high time the Central Banks in the region put in some controls to prevent this kind of monopoly. These banks are killing us because they know that we have no other option apart from them.