Gordhan: Banks must be more inclusive
Johannesburg - Lack of access to banks is still a big
problem in South Africa and must be addressed by the financial sector, Finance
Minister Pravin Gordhan said on Tuesday.
"Access to banking remains a key priority... there has
been improvement, but more can certainly be done," Gordhan told the
Banking Association of SA's second annual banking summit.
He was aware of innovative developments in banking, such as
mobile banking in rural areas, but these needed to be reinforced and sped up.
"These innovations must surely make it possible to bank
more than 70% of South Africans by 2013," he said.
Gordhan said high bank charges were also still a concern.
Although there was evidence the banking sector was moving in
the right direction, it might "need some help to cross the
threshold", he said.
Asked whether banks should be nationalised, Gordhan
answered: "We are a democracy... we don't lock people up for expressing
what might sound like heretical views.
"As a government we have made it very clear our
views... the banks are there, they'll work."
Gordhan encouraged banks to be more supportive of small and
"A critical area where banks can make an important
contribution... is in the area of lending to small and medium business."
He said more resources should be directed to this sector to
promote entrepreneurship and to ensure small and medium businesses made a more
meaningful contribution to the economy.
Bank charges are prohibitive. They should be banned and then banks can earn their keep through the money they make by borrowing money at a lower rate than their lending rate. That will seperate the wheat from the chaffe. Dept finance should give the banks a period of notice to either get their charges down to realistic levels or face legislation outlawing charges.
Banking charges are prohitive. Mr Gordhan knows this, because he has taken issue with it before. So the Dept of finance should consider legislation to outlaw bank charges (the banks should make their money out of lending, because they borrow from you and I at pathetic rates and lend it out to others at sublime rates) and give the banks an ultimatum. Make your charges reasonable or we will ban them.
The reality is that at present most people who don't have a bank account do not need one...because they simply do not earn enough to see any benefit from it.
If the cost of doing business can be reduced, banks can drop their fees. The cost of business that the government is supposed to have control over: crime. We pay more than any other country for insurance because crime is so high. It also requires a massive private security industry to keep our assets safe. Not only are we taxed to fund the SAPS, we also pay private security firms. Taxes: this affects companies directly, both company tax and individual taxes. Now there will be NHI and Tolls to contend with as well. Ironically NHI is required because the state failed in its mandate to provide healthcare, now we pay again. Education: because of the low standard companies are need to fork out millions to train people, contribute to the SETAs etc. And the SETAs are useless. Give us the efficiency in our society for our tax money and business, including banks, can give you jobs. It is too easy to just point a finger at the private sector. I long for the day when a politician says: "the government will do everything in its power to make it easier for every South African to get an education, a job, start a business etc. because that is why we collect all those taxes."
Here's a really good, easy way for banks to reduce their costs. Pay top executives a reasonable salary. Note: reasonable. They can get paid a lot, they can certainly have a nice lavish lifestyle. Unfortunately though merely getting paid a lot would mean a very drastic cut for a lot of them from the over-the-top, sky-high, completely crazy megabucks they're pulling in now. Sorry, but NO individual is worth the amounts that get bandied about.
After that, it would be a lot easier to take them seriously when they announce retrenchments with big tears in their eyes.
Asked whether banks should be nationalised, Gordhan answered: "We are a democracy... we don't lock people up for expressing what might sound like heretical views.
"As a government we have made it very clear our views... the banks are there, they'll work."
That's not really clear. Question: Should the banks be nationalised? Answer: The banks exist. They function.
Not exactly crystal on that front.
The problem with banking the unbanked is the Big 4 banks in South Africa try every way possible to stifle the efforts of the likes of Capitec and Wizzit. The Big 4 want the get the revenue for themselves but do very little to attract the customers.
As far as fees go, well there are 3 problems. Firstly is the cost of moving cash which forces the banks to charge cash handling fees to customers on deposits and withdrawals. Then there is the high fees charged by SASwitch for electronic transactions. Finally, there is the greed of the banks themselves. The number of fees and the amounts charged are higher than in a lot of countries.
"A critical area where banks can make an important contribution... is in the area of lending to small and medium business."
You forget that the government passed a law calling for FICA. Now the banks can't legally lend money to small & medium businesses as they aren't credit worthy... ROFL!
So what does FICA have to do with people' credit worthy? Why misinformed people always make noise. FYI FICA - Financial Intelligence Centre Act, 38 of 2001. This law was passed to regulate the movements of funds within the boarders of SA (who & where) in short.
ZeDon, I think you are referring to the National Credit Act (NCA).
Banks never used to charge you to withdraw money. If the government contain get the banks to play ball then they should seize the moment and give citizens an alternative Post office account with atms that are cheap.Capitec is now the cheapest and pays the best interest. Support them. .
Unemployment is one of the biggest challenges in South Africa. It’s encouraging to see policy makers beginning to realise that to truly address this problem there needs to be a thriving and growing economy and more specifically a prospering entrepreneurial community. Unfortunately, many great entrepreneurial ventures are stifled from the very beginning as entrepreneurs encounter hurdles in obtaining finance. Banks need to step up!
Very critical indeed...banks are ripping us all that could be helping to build our families. There's bank charges almost on everything i.e. cash withdrawals from inside and/or ATMs, deposits, transfferes, admin fees, service fees, sms fees, and so forth. We are charged for any movement in your account, especially cheque accounts....please help out.