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Enquiry into high bank charges gets started

By unknown | Nov 02, 2006 | COMMENTS [ 0 ]

Thomas Mclachlan

Thomas Mclachlan

The Competition Commission's enquiry into aspects of competition in the banking sector and the national payment system began its first public hearings in Pretoria yesterday.

Chaired by PricewaterhouseCoopers chairman Thabani Jali, the enquiry would be holding national hearings throughout this month at which banks, consumer groups and regulatory bodies were invited to make presentations.

The commission's enquiry manager Charles Frank said it had received about 215 submissions from the general public. The submissions were received from all the major banks and retail shops, including Pick 'n Pay and Shoprite Checkers. Eskom has also handed in a submission.

"At this stage it is anticipated that the final report of the enquiry will be handed over to the Competition Commissioner by July 31 2007," Frank explained.

This would follow additional public hearings, held in March and April next year.

The findings of the report will be used to determine whether a formal investigation into banking charges was necessary. This means that bank charges are unlikely to change for some time, even after this month's findings.

The enquiry was initiated when a study commissioned by government raised concerns about the high level of banking charges among local banks.

This led to another report, released in April, entitled the "National Payment System (NPS) and Competition in the Banking Sector."

The report found that increased transparency was needed in the industry to reveal exactly how banks justified their fees.

The NPS is the system which is responsible for the exchange of money between banks, retailers and their customers.

Concern was raised regarding the prices that banks charged customers for services and the costs that the banks actually incurred in delivering these services. The enquiry would assess whether this was fair, and was serving banking customers and was truly competitive. If this is not the case banks may face allegations of cartel-like charging. - With Sapa


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