push for cheaper bank charges
TREVOR Manuel put the brakes on the Competition Commission's 2008 demand for cheaper bank charges - but the issue is back on the table, commission chief Shan Ramburuth said yesterday.
Briefing Parliament's new economic development committee he said the commission, Treasury, SA Reserve Bank and Department of Trade and Industry had set up a team to ensure that the 28 recommendations of the commission's 2006-08 banking inquiry are now enforced.
The proposals ranged from a R5 cap on the penalty for a rejected debit order to a reduction in ATM costs.
"The inquiry believes it is not the remit of the banks to further penalise their customers," the report said.
Ramburuth said the commission had been committed to full implementation until the global economic crisis erupted late in 2008.
"Our report got released right at the time when this financial crisis hit the world and there were a number of sensitivities around that because we had the minister of finance (then Manuel) saying: 'You know, we can't be raising questions around the integrity of South Africa's financial system in this climate - you know how these market sentiments work and we're going to have to be careful around how we do that'," he said.
ANC MP Buti Manamela was outraged: "The most ridiculous thing is that the economic crisis was partly caused by the financial sector, and yet we say that because there is a global economic crisis we should halt the process of investigations and all of that. It is the most ridiculous thing I have ever heard."
Ramburuth conceded that the commission had treated the sector with sensitivity.
"There have been claims from the banks that there have been changes. I think the general feeling, though, is that banks could be doing much more independently in order to become more competitive," he said.
Responsibility for the Competition Commission will shift in April from the Department of Trade and Industry to Ebrahim Patel's new economic development ministry.
Norman Manoim, chairperson of the competition tribunal that adjudicates in disputes, said current penalties - limited to a percentage of a single year's turnover - were inadequate.
"Cartels typically last for a lot longer than one year. One of the weaknesses of the legislation is that we can only fine people for one financial year, and I think that under-enforces against a long-term cartel."