Banks blame broadband, cash costs

2012-02-23 00:00

FEES charged for financial services must come down.They get in the way of efforts to encourage South Africans to invest in personal savings, Finance Minister Pravin Gordhan said in yesterday’s budget speech.

“The financial industry must take more urgent steps to reduce costs and introduce more appropriate and transparent saving and investment products, including annuities,” he told Parliament.

“There is also much to be done to improve market conduct practices in the financial sector.

“The ‘treating customers fairly’ initiative will be accelerated to protect customers more vigorously.”

In its reaction, the banking fraternity said certain conditions peculiar to South Africa contributed to the high fees.

According to a Sapa report, the Banking Association of SA said broadband costs, the costs of protecting cash and significant compliance costs contributed to banks’ fees being what they are.

The association said increasing competition was leading to a more efficient sector with lower costs.

It welcomed Gordhan’s measures to encourage savings.

“We welcome the initiatives towards tax-exempt savings products and commit the financial sector to working with government to give effect to this.”

The association called on the government to work with the private sector in developing the infrastructure to which R845 billion had been committed. “We urge government to create the opportunities for private sector participation in these projects through sound PPPs [public private partnerships] and other mechanisms.”

The Banking Association of SA is an industry body representing all registered banks in South Africa. — WR.

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