An Economist has said that the pronouncement by the Central Bank to prohibit unwarranted bank charges and fees will motivate more citizens to open bank accounts, adding that the move can also lead to lower lending rates.
Mr. Mweemba explained that when a lot of people bank their money, it can trigger the lowering of lending rates because banks will have enough liquidity to loan out.
He said the Bank of Zambia’s pronouncement also provides an opportunity for financial institutions to collect more from people.
On Tuesday, the Bank of Zambia (BoZ) issued a directive on the prohibition of unwarranted charges and fees to all financial service providers, which came into effect on Tuesday the 4th of September 2018, through Government Gazette Number 6693, is pursuant to section 167 of the Banking and Financial Service Act No. 7 of 2017.
BoZ Deputy Governor for operations Bwalya Ng’andu said that the Central Bank had determined that the imposition of 26 unwarranted charges and fees on members of the public is an affront of the rights of consumers of financial services.
Dr. Ng’andu says imposition of 26 unwarranted charges and fees also undermines efforts towards financial inclusion in Zambia.
Below is the list of the 26 items classified as unwarranted
Koma these Banks, charge for aborted transaction and charge for PIN Reset, awe sure. You mean these things were happening? What did it take the country so long to realise these. Even Charge for giving them your money? I really don’t even want to thank whoever effected this, but rather say this is silly and late. Why did they leave it for so long. This is pure laziness on the part of the authorities
If I where not in bed I would seriously have collapsed; you mean to tell me you get charged for resetting your PIN; holding a debit card; charge for withdrawing own monies; surcharge for using an ATM; charge for opening an account!
Am seriously hyperventilating from the shock of this! Un-fing-believable!
This was serious exploitation by banks. I commend BoZ for stopping these frivolous charges with immediate effect because truth be told these banks have stolen enough.
Well done BOZ for listening to the cries of the people. Banks had a field day prying on helpless citizens. As the saying goes: “Sometimes you may win, but some day, you will definitely lose”. This is it!!!!!
Job well done for those who campaigned for cancellation of these obnoxious charges
@ #1.2 Why commending BoZ?
It is them (BoZ) which allowed this legalized ROBBERY in a first place and it took them (BoZ) more than 20 years to understand what is going on.
we actually need refunds
Yes, the banks charged the docile Zambians for that…really laughable…easy money for them…i learnt a big lesson as far back as 1997 left money in an account come back 10 years later and there was nothing and account was closed. You are supposed to rewarded for leaving money in your account…I hope BOZ also challenged them to introduce a basic account with debit card at no charge.
This should be extended to Mobile Money dealers. Their rates for withdrawing yourr own funds are too high.
I understand that they’re providing a service, but they’re also reaping huge profits from investing your money daily until you demand for it.
Besides, if these charges were unwarranted, then they were illegal, and Banks must voluntarily refund all affected even just for one or two years as a goodwill gesture…
Banning these charges is not enough. Banks should be ordered to refund all customers whose money was stolen in this way. That’s how its in advanced economies.
Shame, too little too late. Going forward banks should be treated with every suspicion.
How about a refund ba BOZ?
In the UK banks that were ripping people off 10 years ago are made to pay back..
Mordern day bank robbers for real (the Jesse Woodson James of the mordern day ).
Next Boz should find a way of making the banking sector the engine of growth for sme’s by lowering interest rates on loans,mortgages, vehicle and asset finance.
Something positive at long last.
How are banks going to make their money? As much as this is a good move, and i like it, i hope blind politics are nowhere near it. The quality of service and jobs need to be looked at. Some of these fees were too small to matter but relevant for banks to continue to exist.
Expect job losses and banks, as businesses in the business of making money, will be justified to cover themselves up and Government will be running around to negotiate with banks. True, some charges were ridiculous and surprising but we would have done better than tell banks to pay a teller a salary for providing services to the public for which services the bank makes no money.
Most of the jobs in banks are artificial and thats why the future of people working in banks is uncertain. A bank can work 24hrs without visible personnel. So just tell your brothers and sisters working in banks that the gong has been sounded and very soon they will be irrelevant as machines can easily do what they fail to do properly. The machine can dispense cash and can receive cash. It can also give loans and can deduct from your income repayments.
Disaster!!!!
It is not all accounts which will not attract monthly bank charges but only basic savings accounts without cheque book. Besides the world over banks do not survive on bank charges but on interest earned on Loans. So the banks have to be innovative and the move will encourage the unbanked majority to bank and this in turn will increase the liquidity of the banks which will trigger lower interest rates in the long run. So this is a win win situation but it will take some time.
Kwalanga Kasawelo – Who told you that Banks should survive by stealing people’s money? You mean it is okay for you for Banks to be overstaffed and pay people on money stolen from poor peasants?
Go out more ..you will learn how banks make their money..by offering services
Boss you have forgotten some more.Here is an additional list:
Charge for breathing the same air with the tellers when withdrawing cash over the counter.
Charge for not using your account over 90 days.
Charge for withdrawing cash over the ATM machine more than 3 times
Charge for asking your girlfriend/boyfriend to use your ATM card
Charge for not using your ATM card for a long time
Charge for not depositing in your account any money for more than 30 days
Charge for closing an account for a person who has died
Charge for using your ATM card to withdraw cash to pay libido due to social pressure problem…you know it!
Kikikiki!!!!!!!!!! Its just too much
Disaster.
The only way to make ease money is by stealing and the Banks in Zambia have shown it.
Good move BOZ. I will now go back and open an account with the bank. I had closed my bank account and starting keeping money in MTN money because of these silly bank charges.
I’m thankful such abolitions have been effected.
But I’m now wondering, how are banks going to make money?
Banks must have legitimate ways of making money. They should not be stealing from people. Let them employ on necessity and in accordance with their capacity to pay. They should not over employ and hope to pay employees from stolen money.
I keep my dollars under the mattress (come get it) because when I tried to open a dollar account I was told I would have to pay a fee every month that the money was in my account. Oh, for good measure, they said there is no savings account for the dollar… sooo, I took my bag back home and stashed it under my bed. Yesssss come get it!!!!
Fellow country men and women, this means more money in your pockets and lower taxes. Thanks Mr President E.C. LUNGU you really walk the talk.Please Jealous down,lets congratulate the Head of state for good measures he takes to uplift our living standards.
Keep that headless chicken out of all this.
He is clueless and was accident in the first place.
Edgar Chagwa Lungu is the man. EC has jolted BoZ into action
We thank the BOZ for coming to the aid of the masses. Banking was almost going to be a preserve of the rich only had BOZ not intervened.
I had a ” Priority Account’ with Barcklays Bank for over 15 years but was closed without even notification because it had accrued bank charges of about K700 .
This came to light when I sent my son to deposit a check at the Manda Hill Branch in that account but the banK refused to accept the cheque because the account was closed. I pleaded with the bank staff
( someone called Sally) to accept the cheque and deduct the accrued bank charges from the cheque as it was more in value than the bank charges but she refused and asked me to just apply afresh just like any other new applicant needing banking services.
Up to now l feel l was not fairly…
the question is. how will the banks pay the rentals and the C.I.T that transpont money to the off-site ATM’s and maintain the machine if they don’t generate income.Its as good as telling them to close the ATM thereby creating job losses less tax for government. It’s a wrong move all together
Rubbish thinking Reuben. Banks have been making huge profits without working for it. I had to find a fixed deposit account with FNB that did not attract monthly charges. It was like borrowing money from the bank and expecting the bank to pay you for keeping the money. Bans in Zambia are run by people who have no idea on how to invest depositors money
Reuben you sound like Bank Cash Custodian.
ATMs serve three purposes: keep banking hall queues small, client convenience and for smart banks serve as additional deposit collection points.
Implication: Replace excess Branch Staff or retrain them to do serious banking, More funds to lend out from deposits. Huge savings and profits that can purchase more ATMs, pay for CIT & Staff retraining + redundancy.
This is a WIN-WIN solution without those frivolous ATM Charges to users. Same for Debit Cards and others.
Depositors must be encouraged to use ATMs, effective technology platforms even when borrowing and not be discouraged.
ZAMBIAN BANKS WAKE-UP. This is the 21st Century. MOVE WITH THE TIMES!!!
I’m happy to come down and represent those that wish to pursue refunds.
This move will encourage people to start saving. The banks should now reduce lending rates so that more people can get loans and in return the banks will make profit.
The banks have given initiative to loan sharks who charge 75% and upwards in interest a month.
brovo
Yaba,and all customers were docile and swallowed those charges as normal.The other thing is a bank soliciting from someone who was just a garantor and didnot receive any money from the bank.what is that?e.g when yr employers sign loan application papers for you to get a loan and you fail to repay the bank will the bank demand repayment from your employers or they must pursue the person who they paid the loan?
If these charges were not supposed to be there ,then a refund must be effected as soon as possible …. Ala ubushiku usheme nechimbala ciloca , nangu futile ati ” lfyakulya ubushiku bafimweena Ku malushi “.
It is good to see details of the prohibited charges. I wonder, however, what (if anything?) BOZ will do now to prevent banks from jacking up supposedly “warranted” fees such as monthly maintenance charges on accounts with checkbooks.
From the reaction of the banking sector threatening job losses and other nonsense, it seems they still don’t get the simple fact that banks are meant to make their profits from genuine value addition (i.e. by lending depositor’s money on to others) and not from the type of parasitic fees they have been accustomed to. Bwalya K.E. Ng’andu (Dr.) needs to finish the job and ensure that banks do not merely introduce new tricks to continue their unproductive ways!
Looking forward to the closing of Standard Chartered – the most perverted of them Banks all. Charging on every Banking orifice.
Long life to banks led by Fnb which put service to the masses in the forefront. They showed BoZ that a Bank can survive without robbing charges though they felt the peer pressure and were sliding to where the rest were.
Those of you who keep asking about how banks will make money, are surprising me? You have been told that banks should make money through proper business engagements not through these hidden charges. Is that too difficulty to understand or is it the question of Zambians don’t read they just like talking, meaning you don’t go through your friends postings before you start shooting.Banks should lend money at competitive rates, help SMEs grow their businesses through advise and working capital assistance. Why has Mr Bwalya Ng’andu used the word ATM surcharge which is a general term instead of being specific on ATM withdraw fees the same way he stated ATM deposit fees.His he trying to be clever?BOZ should be forthright if they mean this.
I like the term “unwarranted” bank charges! How did the BoZ conjure that one! But excellent decision!! The banks must be ashamed of themselves for this robbery but they were not and yet they are financial institutions!!!! They are lucky there is no refund to their “victims”!
These charges are definitely daytime robbery at it’s worst. This is illegal for sure and if we had an independent and vibrant Parliament, they would have been summoned long time ago to explain this white collar crime. They should refund the money.
In Australia, ordinary citizens had a class action lawsuit against the banks for dodgy charges (much better than most of these) and took the banks to court and won. Banks were ordered to refund. And just right now as we speak, the Australian Parliament is conducting a commission of enquiry on banks’ shady business practices and they are unearthing scandals like charging dead people and aiding mafias in money laundering. The govt watchdog there has charged these banks and ordered to pay enormous amounts of money in fines for these criminal…
continued…
The govt watchdog there has charged these banks and ordered to pay enormous amounts of money in fines for these criminal activities.
Why couldn’t we do the same in this country? There’s more to it than just abolishing illegal fees. And while you are at it, why don’t you look into the ridiculous interest rates of 30% and more? Zambia is indeed a failed state!
And yo expect people to invest under such unnecessary deductions?It is a mockery.These banks were encourage people to invest when they have created an environment not conducive for the same.This was daylight robbery and pilferage of the worst kind.
Good job! Is HH among unwanted species too? Please let us know.
This is good and a return to normality. But the surprising thing is how long it was tolerated by the populace. That is why I always argue that civil society is too weak and idle in Zambia, especially where you cannot relay on political parties and an impotent Parliament.
This is shocking but not surprising because Zambia is a lawless country.