Bank charges to get review

2011-02-26 00:00

CAPE TOWN — Finance Minister Pravin Gordhan says measures need to be put in place to ensure that banking charges are fairly set.

Without giving much detail on the measures, Gordhan said that the Treasury would be doing a review on the banks and assess if there were any shortcomings in dealing with banks’ charges, following the findings of Judge Thabani Jali’s inquiry into competition in banking.

“Among the issues to be addressed are the findings of Jali’s inquiry into competition in banking — findings that are echoed by many people’s complaints that bank charges are high and opaque,” the minister said.

Quoting a citizen who wrote to him, he said: “A senior citizen, Mr Bill Nobile, wrote to me last week: ‘We do not fully understand the complexity of the payment systems for credit and other cards, but there does appear to be considerable leeway in reducing costs to the consumer, including the elderly’.”

Gordhan said he had met with the chief executives of the banks to take up this issue and will continue to meet them to deal with the matter.

The minister also spoke about proposed reforms in financial regulation. He said the reforms included a shift to a twin-peak system of financial regulation with market conduct under the Financial Services Board, and prudential regulation in the Reserve Bank.

Treasury said the South African Reserve Bank’s mandate for financial stability will be underpinned by a new Financial Stability Oversight Committee. Treasury said the measures are also there to enhance consumer protection. This would be done by broadening the structure of the Financial Services Board to include a banking services market conduct regulator.

Treasury added that new legislation will be required to implement the proposals. This year a couple of bills dealing with banking, financial markets, credit-rating agencies and the regulatory powers of supervisors will be presented before Parliament. A Council of Financial Regulators will also be formalised, Treasury said.

— Moneyweb.

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