Dear Bank of Ghana,

Many of us have watched in awe and dismay the bravado with which Ghanaian banks (banks operating in Ghana) charge customers various nebulous fees with utter disregard to these very customers. For some of us the attitude of these banks just remind us of the airline industry where people?s complains about harsh charges go unheeded because there seem to be no effective alternatives to the use of airlines for long distance and trans ocean travels. In the case of the banks in this country, they believe they can get away with it.

wpid-bank-of-ghana.jpgBelow are two text messages I recently received from one of my favorite banks on June 5, 2015 and June 19, 2015 respectively:
?Dear Customer, Please note that GHS2 plus VAT will be charged on over the counter withdrawals below GHS1000 for personal accounts?
?Dear Customer, Kindly not that effective 1/7/2015, our account maintenance fees will be reviewed as follows: Corporates ? GHS 150, SMEs ? GHS 40, Individuals ? GHS5, Public Service Pack ? GHS3, Employee Pack ? GHS4, FX/FCA (charges in the currency of the account) Individuals -2, SME and Corporates -10?
A cursory look however at your (BoG) website revealed the following as your mandate among others;
?The Bank of Ghana shall have overall supervisory and regulatory authority in all matters relating to banking and non-banking financial business with the purpose to achieve a sound, efficient banking system in the interest of depositors and other customers of these institutions and the economy as a whole.?
In light of the recent text messages received from my bank, I would like to focus on the first part of the purpose for your existence, ?to achieve a sound, efficient banking system in the interest of depositors and other customers of these institutions?. I will discuss issues about overseeing a sound economy in another article. Until I decided to check your mandate, I honestly thought, erroneously of course, (just as many Ghanaians) that your purpose was to serve the interest of financial institutions.
It is not surprising that the banking industry is one industry that keeps declaring super normal growth in profits Quarter after Quarter, year-on-year regardless of what is going on in the economy. This is an industry that can literally do nothing and still ?earn? profits of over 25%- 30% per annum by investing in Government debt and by charging customers ridiculous fees.
BoG, it appears you protect the interest of the banks to the detriment of the poor customers, ordinary Ghanaian workers, market women, SMEs, young and struggling entrepreneurs etc. Consider the following scenarios based on the text messages I received from my bank and please let Ghanaians know whether you are really working in their interest.
I. Scenario 1: Individual Account Holder
Unlike many western countries, in Ghana, transactions executed on one?s bank ATM (not third party ATMs) come with a fee with the exception of a couple of banks that have made such transactions free. Per the first text message I received, I am punished by my bank (charged GHS2) for coming into the banking hall to withdraw amounts less than GHS1000. It is now obvious the only time my bank wants to see my face is when I am bringing in money; this can only be described as legendary customer service, right? Considering that I am charged flat fee of GHS5 monthly (per the second text message) for account maintenance, one would think I would be allowed to withdraw from my bank?s ATM without a fee, which definitely is not the case.
The question one would want to ask the BoG is what is meant by ?account maintenance?? Is this a tax levied by the banks on customers for using their services? Are these bank charges meant to help increase the percentage of Ghanaians that are banked? As much as I support the use of the ATMs as a way of decongesting the banking halls, I think it is highly unfair, harsh and elitist to charge the poor for using the ATM of their own banks. I however have no problems with banks charging for third party ATM transactions.

II. Scenarios 2 & 3: SME and Corporate Account Operators
The table below shows what will happen to an SME and a Corporate customer who deposits GHS500 and GHS2000 respectively and leaves such a balance in the account for a year.

As can be seen above, by the end of a 12 month period the bank will make a profit of GHS2,303.64 and GHS605.91 respectively from the deposits of these two customers. The customers, whose interests are to be protected by the BoG will be left with GHS200 for the Corporate customer, and GHS20 for the SME customer; thus losing 90% and 96% of their deposits respectively without even factoring the 17.5% VAT charges to government and the effects of the 16.9% on their money.
When I emailed, my bank about these charges, the response I got from them made me feel as if I was complaining to an airline company; ?sir, we apologize for the inconvenience but our charges are not negotiable and irreversible?. Customers, particularly the so called middle income people must not continue to sit unconcerned. They must be the voice for the millions of poor people who cannot voice out their own concerns.
I will not be surprise that BoG might be aware that there are other banks which charge fees even higher than those being charged by my bank. There are banks that charge as much as GHS10 per transaction, with yet a large number of them having numerous hidden charges. In these days of IMF support, an additional VAT is calculated on whatever the banks charge their customers. In situations such as the scenarios above, it does not surprise one to see Ghanaians who have no foreign business transactions ?storing? their money in foreign currency to the detriment of the economy.
As if these charges are not enough, the spread between how much interest banks give depositors versus how much they charge borrowers can only be described as robbery. Whereas depositors are paid either no interest at all or interests rates far less than inflation rate, the banks lend those same funds out at interest rates well above 30%.
It is worth noting that your counterpart in Nigeria, the Central Bank of Nigeria (CBN), has in the past sanctioned banks to refund charges to customers and it is seriously working to regulate and in some cases eliminate certain bank charges such as the COT (Commission on Turnover) by 2016. Is this all you can do as an institution ?to achieve a sound, efficient banking system in the interest of depositors and other customers of these institutions?? The BoG must consider emulating the CBN on this issue of bank charges.
Please note that the days of ignorance on the part of Ghanaians on issues such as this harsh charges being meted on bank customers are long gone. Ghanaians are much more aware of their rights and the responsibilities of institutions such as yours to them. I would not be surprised if consumer groups, customers and individuals start class action law suits against banks for perpetuating these types on acts on them. Customers have put up with the lousy attitudes of bank tellers (clerical staff) who call themselves bankers for far too long. The least customers deserve is banks ?pilfering? their hard earned deposits in the name of bank charges.
The era of armchair banking must end. The message must be sent clearly to those Ghanaian banks, that they cannot continue charging unsuspecting customers to enrich their executives and shareholders. Some of these banks with operations in multiple countries are able to get away with certain acts in Ghana that they could never contemplate in the other jurisdictions in which they operate. I will look into some of these acts, such as some of their lending practices in my subsequent messages to the BoG.
The banks should note that if they do not restructure their products, services and charges, in the near future the telecos will take their place. Mobile money is just the beginning of what that future holds for the banks.
?As hunters have learned to shoot without missing, birds will have no choice but learn to fly without perching? ?Chinua Achebe

By Prosper Kwesi Acquah
Business & Financial Analyst, A pro-poor advocate,
Contact: [email protected]

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