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Parliamentary Speech
Appropriateness of high bank charges and various penalties and their adverse effects on both businesses and the public as clients of banks and other creditors once they default
Honourable Tjekero Tweya, Deputy Minister of Finance
Held at Windhoek at the National Assembly
25 October 2005
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Honourable Speaker,
Honourable Members,
Background
A few months ago, during my maiden speech, I stated that, and I quote: "The mandate given to us by the electorate, in particular the Ministry of Finance is to safeguard the financial and real assets of Namibia, as well as to grow the Namibia economy and to improve the living standards of all the peace-loving Namibians". Unquote.
For an economy to prosper and reach new heights, a number of components need to be in place, namely controlling inflation (which the government has managed to successfully control given the circumstances), improved trade, effective and efficient payment systems, financial system stability, amongst others. The concern raised during this debate relates to what many have termed as "high bank charges", and unfair treatment of customers under the current payment systems, operated by our Commercial Banks.
A well established role of banking regulation is to ensure that commercial banks customers are provided with quality services at competitive prices. Thus it is imperative that banks discloses their fees structure, charges and commissions so that customers can make informed decisions regarding their choice of services with commercial banks.
On 14 December 1998, the Bank of Namibia issued determinations on the disclosure of bank charges, fees and commissions; and another determination on Compulsory Suspension of Cheque Accounts by Banking Institutions.
These determinations were issued in the spirit of ensuring that the Banking sector and the payment systems maintain integrity to enable economic activity to take place in the domestic, regional and international markets.
Since it is the responsibility of the Bank of Namibia to ensure safety and soundness of the payment systems in the country, suffice to say that the fact that a significant number of cheques are returned to drawer due to insufficient funds is indeed a matter of concern. However, this fact does in my opinion reflect that the payment system is functioning by protecting service providers against ill-disciplined consumers.
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