MBABANE – The Ministry of Finance has been called upon to engage the Central Bank of Eswatini (CBE) to investigate bank charges levied by commercial banks amid concerns that customers are paying significantly more than their counterparts in neighbouring countries.
The recommendation is contained in the Ministry of Finance report following the portfolio committee debate, which was tabled in Parliament on Monday and is expected to be adopted today. The portfolio committee found glaring disparities in the manner in which commercial banks apply charges across the country’s banking sector. Members observed that customers are often charged different fees for similar banking services depending on the institution, raising concerns about consistency and fairness across the industry.
The committee further found that charges imposed by local financial institutions appear to be higher than those levied by comparable banks within the sub-region.
Members expressed concern that the high cost of banking services places an unnecessary financial burden on consumers and businesses, particularly at a time when many households are facing increasing economic pressure.
The committee, therefore, recommended that the minister for Finance engage the governor of the CBE, whose statutory mandate includes regulating, monitoring and supervising the banking sector, to undertake a comprehensive comparative analysis of charges levied by commercial banks operating in Eswatini.
In addition, the committee recommended that the CBE extend the comparative analysis beyond the country’s borders by benchmarking local bank charges against those charged by banks operating within the Southern African Customs Union (SACU) and the Common Monetary Area (CMA).
The exercise is expected to determine whether local consumers are paying disproportionately higher banking fees than customers in neighbouring jurisdictions.
The committee further recommended that the findings of the comparative analysis be compiled into a report and tabled before Parliament within 30 days after adoption of the recommendation. Members believe the report will provide an informed basis for determining whether regulatory intervention is required to address bank charges.
The matter arose from a submission made during last week’s Portfolio Committee debate on the Ministry of Finance’s budget estimates.
During the debate, it was submitted that there appeared to be inconsistencies in charges levied by one of the country’s commercial banks, with customers allegedly being overcharged for certain transactions.
An example cited during the debate was that customers were reportedly being charged between E79 and E89 for a cash withdrawal of E4 000, a fee members argued was excessive for what they described as a standard banking transaction.
“These charges are too high. The ministry is, therefore, requested to engage the Central Bank on this issue,” the submission to Parliament stated.
In its response, the Ministry of Finance said, as part of ongoing efforts to promote greater transparency in banking services, the bank referred to in the submission had enhanced its systems to ensure bank charges are reflected to customers in real time.
According to the ministry, under the previous system, applicable bank charges were accumulated and reflected on customers’ accounts only at the end of each month. As a result, customers often became aware of the total charges only after receiving their monthly statements.
Under the new system, however, transaction charges are displayed immediately as each banking transaction is processed, allowing customers to view the applicable fee at the time the transaction takes place. The ministry further clarified that the bank had not increased its charges. “The change relates solely to the timing of when the charges are reflected on customers’ accounts, thereby providing greater transparency and enabling customers to view the cost of each transaction as it occurs,” the ministry stated in its response.
Furthermore, the ministry pointed out that bank charges are regulated by the Central Bank of Eswatini and that any adjustments require the regulator’s approval before implementation.
“The current system enhancement does not constitute an increase in bank charges but is intended to improve transparency and customer awareness,” the ministry emphasised.
Despite the ministry’s explanation, MPs maintained that a broader review of bank charges remains necessary to establish whether fees charged by commercial banks are reasonable, competitive and aligned with regional standards.
