There have been some recent developments within the banking sector worth talking about. We have often seen the rampage of hyperinflation in prices of goods and services surging. There had not been many significant changes in the banking sector save for common cash shortages and the like. Lately, however, we have seen a shift as there have been some drastic developments in some banks. In this article, I will give reference to two recent developments regarding two banks. I will also be touching on some noteworthy insights as we move along. Let us get right into it.

FBC Now Requires An Annual Prepaid Card Fee

By the way, this pertains to Visa or MasterCard. FBC recently issued a communiqué as follows, “Please note FBC Prepaid cards will now have the following annual fees applicable to them, US$20 for Business and US$15 for Ordinary cards effective February 2020.” This is notable development because it adds on to an already costly framework that has been in place all along. First of all, it is apparent that the mere charges associated with doing a transaction with those cards are high. Secondly, it is mandatory for one to get that card replaced every two years. Thus to add this annual fee is really stretching the consumers. It is also worth adding that these prepaid cards are limited in that one cannot receive payments through the popular online payment gateway, PayPal.

Standard Chartered Hiked ATM Fees

Standard Chartered recently reviewed upwards their ATM withdrawal fees by 200%. This is from a reasonable ZWL$2 to a steep ZWL$40. They took some time to explain the rationale behind this development as follows, “As you may be aware, as Standard Chartered Bank, we rely on the services of the multiple external service providers in order to fulfil our obligations to you, our clients. In response to market conditions, many of our external vendors and service providers have increased their charges thereby impacting our ability to viably provide certain banking services to you, our valued clients, at the same cost. In the circumstances, we were compelled to review a selection of our transaction fees and charges…” I can also just add that the maintenance fee was raised from ZWL$65 to ZWL$70 and a whole lot of other service charges were hiked.

Some Talking Points

Are The Banks Really To Blame?

I felt we should discuss this first because obviously people have taken shots at the banks for these developments. It is a hotly debatable issue. It is not clear whether or not the banks are to wholly blame or not. If you look at it from one angle, the banks are doing this as a reaction to market developments. For instance, Standard Chartered Bank did highlight that they were compelled to do so by market forces. I believe there is some merit and validity in that to some degree. On another angle, it is also possible that using market forces as a basis can be an excuse used to profiteer. The thing is, it is appreciable that there are compelling market forces and dynamics at play. However, the extent of the charge hikes is somewhat questionable because it is too drastic and high. Emotions aside, it could all be justified really especially considering the mercurial and hyperinflationary environment locally. So what do you think? Are these recent hikes reasonable or too exaggerated? Are the banks wholly to blame or they are just victims of the prevailing circumstances? Kindly let us know in the comments below.

Banking To Possibly Become Increasingly Unpopular

One of the direct effects of such developments is that most people will not be so keen on having bank accounts. This has an overarching effect because it will further drown the possibility of more money being in informal circulation. The state of the economy right now has forced many to close bank accounts and rely solely on mobile money and or cash. To then hike banking services charges can only further tank the number of banked people in the country. All in all, you realise that these developments actually exacerbate the monetary and fiscal challenges in the country.

These are really troubling times for most people. Most people cannot skirt banking e.g. civil servants. Cash still remains a challenge and as such people tend to be forced by circumstances to do bank transactions. Thus the scourge of steep bank charges will always be on their case. In light of this though, I do believe that there are business prospects in those who will come up with innovative ways to fill the gaps being created in the banking sector.