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Construction companies are now undertaking a second round of self-examination into uncompetitive behaviour.
Cape Town - South Africa's Reserve Bank will shortly release results of a study into the gap between the central bank's main interest rate and prime lending costs, but is not formally investigating competition between commercial banks, Finance Minister Pravin Gordhan said on Wednesday.
The banking sector in South Africa is dominated by four major banks, Standard Bank, Absa, Nedbank and FirstRand and has been criticised for being uncompetitive, allowing banks to charge consumers more than their overseas peers.
On Tuesday Dominique Strauss-Kahn, managing director of the International Monetary Fund, said more competition should be introduced into the banking sector to help tackle inflation.
"The South African Reserve Bank has indicated to the National Treasury that there is no investigation on interest rates charged by commercial banks," Gordhan said in response to a written question in parliament.
"Instead, there is a joint committee to discuss the spread between the repurchase rate and the prime lending rates ... and their report will be made public very shortly, within one or two months," he added.
The joint committee of members of the central bank and the Banking Association of South Africa (BASA) was formed in May last year after former central bank Governor Tito Mboweni questioned the steady 3.5 percentage point gap between the Reserve Bank's base rate and commercial bank's prime rates.
Currently the repo is at 7% and prime at 10.5%.
Mboweni had also complained that the interest rate charged to some customers, over and above prime, was too high.
Between August 2006 and June 2008 South Africa's Competition Commission looked at, among other things, the level of bank charges.
It found that charges to consumers for transactional accounts and payment services were, with some exceptions, "well above" the level that effective competition would allow.
On Tuesday, Competition Commission chief Shan Ramburuth, told a parliamentary committee that a joint structure, including treasury and the central bank, was looking at how best to implement recommendations emanating from the earlier enquiry.
"The fact is the enquiry has got people to rethink their behaviours and how they work. The extent to which that has happened is hard to tell," he told journalists.
- Reuters