The IFP welcomes the initiative by the
Competition Commission which is conducting a preliminary probe
into fees and charges in the banking industry. The IFP has long
been vocal on the subject of South Africa's exorbitant bank
charges which the party believes are the highest in the world.
"Affordable banking services are the
prerequisite of a maximum participation in the economy at all
levels. The South African banking industry is failing the masses
badly by deliberately excluding large pools of the rural
population due to excessive charges," said Dr Lionel
Mtshali MPP, who leads the IFP caucus in KwaZulu-Natal
Provincial Parliament and holds the party's Finance and Economic
A report that has triggered the probe on
the part of the Competition Commission, found the ability of
consumers to make rational choices was undermined because the
full costs of banking services were rarely spelt out.
The report, commissioned by the central
bank, found that the four main banks -- Absa, Standard Bank,
FirstRand and Nedcor -- accounted for 83% of total deposits by
the public in June 2003. The report also states that since 1999,
average annual credit card fees at major banks grew by 29% and
service fees on current accounts doubled.
Dr Mtshali also said:
"While the exorbitant bank charges
are pushing the rural poor into the informal sector, the
ultimate losers in this gamble are the banks themselves. They
are losing out on a huge, largely unexplored market.
"The IFP welcomes the upcoming probe
on principle. A parallel intervention conducted by the European
Commission, the executive branch of the European Union, resulted
in massive fines for a number of Austria's major banks for
breach of competition. We would like to see similar action taken
in this country."
Contact: Dr Lionel Mtshali, 083 256 4902