Excessive Exploitation By The Commercial Banks In Ghana

If you are reading this and are a customer of a Ghanaian bank, it is likely your bank is exploiting you in more ways than one. This illicit practice has survived for a long time because we have a weak consumer watch-dog group in Ghana and the Bank of Ghana appears ineffective looking after the interests of the public through regulation.

Some time ago, the Bank of Ghana (BoG) gave directives to banks to abolish or reduce what it described as unwarranted bank charges and fees. But all this appears to have fallen on deaf ears. As a result, undue exploitation of customers, unfair and uncompetitive practices by the commercial banks in the country have conjoined to discourage many Ghanaians from patronizing the services of the banks. The last time fire gutted the Kumasi Central Market, cash exceeding billions of cedis got destroyed. Similar incidents have taken place previously at the Makola Market and other markets countrywide. This is because the services of banks in the country lack human face so traders have no recourse but to keep millions of cedis under market tables.

The irrational minimum initial deposits, punitive deductions for maintaining balances below thresholds, punitive charges for cheque withdrawals, salary processing, use of ATMs, extremely low interests on savings are just a few of the various complaints from the banking public. And BoG's inability to enforce its own rules and regulation makes most Ghanaians to have little faith in the banks. The bank tariff regime in the country is not only unacceptable but is illegal.

In Ghana when one uses the ATM to withdraw cash from his/her account, one is charged between ¢ 2000 and ¢ 15000 depending on the bank. When you request an interim bank statement, you are charged.

Bank of Ghana would do the public good if pressure is put on the banks for them among other things to eliminate the minimum initial deposit requirement, abolish the fees for account closure, account maintenance, and reduce the Commissions on Turn Over by charging flat rates rather than percentage of volume of transaction, among others.

Foreign banks in the country are the major culprits in the excessive exploitation of customers. Services which these banks render in Europe, America and the rest of the Western World free attract charges Africa-and we are the poorer people. Why is it that in England Barclays Bank do not charge customers for using ATM's to withdraw cash but when it comes to Ghana they charge us. Are we trying to say that Bank of Ghana is not aware of this broad day light exploitation?

In England one needs a minimum £ 1 (one Great Britain pound sterling ) in some cases to open bank accounts but when these European banks come to Ghana, some will request a minimum of one million cedis to open an account and also keep this as a minimum balance. Going by the national minimum wage, one needs 75 days or nearly 3 months work to get money minimum amount to open account in Barclays or Standard Chartered or any of the foreign banks. The same person would have to keep his 75 days' wage in bank even when he needs it he cannot make a withdrawal.

The population of Ghana is nearly 20 million and if each Ghanaian were to have in his or her account a minimum of ¢ 1 million then the total bank deposits in the country would be 20 trillion cedis. With this money Ghana can boast of an even distribution of wealth.

ATMs were introduced to help decongest the counters. The banks can thus downsize staff numbers whilst enhancing service delivery. And when customers help banks to decongest banking halls by using ATMs, they are charged. Is there sense or fairness in this? Imagine if all customers decide to boycott the use of the ATMs and come to the banking halls, how would the banks look like?

On a recent visit to my bank, I noticed an unusual charge ¢ 100,000 (one hundred thousand cedis) on my statement. I was told by a personal banker that the charge was for a bank statement I had requested. And that amounts to about US $12 for one sheet bank statement, a service that is provided free of charge in France and the rest of Europe. Countrymen, my bank charges ¢ 100,000 for one sheet document that can be generated by the click of a button. I am leaving out the name of my bank for this once only –because they promised to return the charge into my account but next time, I will name and shame them.

Then also, despite exploitations sometimes one spends close to two hours at counter for depositing in cash or cashing a cheque. Most of these banks do not even have washrooms for their customers. To cover the weakness at the counter service some banks especially Barclays Bank of Ghana has in place a privileged class service provided for an additional fee – for the rich? Maybe.

Some of our commercial banks are enthusiastic to lend to the import and retail sectors to the neglect of the production sector. Of course, there is less risks attached to such lending, its quick turn-over makes it more attractive. But of course they should be concerned about the national interest as well and I think BoG should insist that Banks support our development efforts. It is important to recognize that, in putting away bits of our disposable income in the banks, we collectively create a pool of funds from which both the public and the private sector should be able to borrow from for both investment and infrastructure.

And how about the Banks investing some of their huge profits directly in developing our national infrastructure. Will the top Banks consider investing in our electricity and water infrastructure, our roads and hospitals etc. Or if the banks think that the only people they are concerned about is their staff whom they pay quite well, then the Ministry of Finance should think about charging the banks a development levy, after all it is an open secret that the banking industry is the only thriving industry in Ghana at the moment.

Then also the Government should create an enabling environment as well as actively support the creation of local banks like the First Allied Savings and Loans Banks so that if the foreign owned banks get too complacent, we could boycott their services. After all, the customer is King.