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Nekundi calls on BoN to regulate bank charges

2023-05-05  Correspondent

Nekundi calls on BoN to regulate bank charges

Maihapa Ndjavera

Member of parliament Veikko Nekundi has called on the National Assembly to urgently amend the Bank of Namibia (BoN) Act to enable the central bank to protect the most vulnerable in Namibia’s society. 

In the same vein, a local law firm has approached the central bank to compel commercial banks to provide more relief for heavily indebted Namibians, particularly as banks continue to repossess homes to the financial detriment of ordinary citizens. 

Motivating his motion last week, Nekundi said bank charges are but another scheme by commercial banks to swindle people out of their hard-earned money. 

“These bank charges are not only high; they are unjustifiable and unreasonable. These schemes are designed to rob our people and derail them economically. When BoN directed that cash deposit fees be done away with, the capitalist institutions quickly came up with account management fees, another daylight robbery scheme,” the parliamentarian charged. 

The motion, according to Nekundi, who is also the works and transport deputy minister, seeks to amend the central bank legislation to include powers to regulate commercial banks and give BoN the right to oversee all bank charges. He further asked the motion to be transferred to the relevant standing committee for further investigations.

Nekundi added that skyrocketing
interest rates, coupled with consistently rising inflation, are bleeding ordinary citizens dry, a situation he said is worsening and making it more difficult for people to put bread on the table. 

Some of the charges that irk Nekundi include those for electronic fund transfers (EFTs), cash and withdrawal charges, debit and credit card swiping, online transactions as well as account management fees. 

He also said unjust practices, unmonitored schemes, bad corporate governance and weak cyber security from commercial banks have led to the closure of businesses from which many depend for their daily lives. 

Nekundi further claimed commercial banks continue to make massive profits despite trying times for individuals and the economy at large.

On the back of elevated interest rates, commercial banks reported significant profits during the past financial year. Nekundi believes these profits were achieved due to higher charges demanded by commercial banks.

Meanwhile, a local law firm has also approached the central bank on behalf of numerous home loan holders who have lost their homes as a result of debt owed to commercial banks. 

The letter from Metcalfe Beukes Attorneys, dated 2 May 2023, asks the central bank governor to consider a programme similar to one used by banks in South Africa, whereby commercial banks go out of their way to assist homeowners in tough times. 

This programme works by the commercial bank financing any shortfall in bond repayments at zero interest for ten years after a proper market-related selling price has been obtained for the property. In addition, such home loan debt defaulters are not listed with a credit bureau.

“Justice and fairness cry out in Namibia for such a programme to be made compulsory in our country to avoid the present scenario where commercial banks are enriched by the economic woes and misery of home loan debtors,” the Metcalfe Beukes letter stated. 

The law firm also pointed out that the central bank extended relief measures until 1 April 2024 for commercial bank clients, following the fallout of the Covid-19 pandemic. Nonetheless, the firm claims that “commercial banks however simply pay lip service hereto and continue to persecute home loan debt defaulters to the point of economic abuse”.

Nedbank Namibia recorded a total income of N$1.2 billion for the year ended 31 December 2022, representing an increase of 13% from the previous financial year, with profit after tax up by 35% to N$275 million.

Capricorn Group Limited achieved solid results with profit after tax for the six months ended 31 December 2022, increasing by 20.3%, compared to the prior period. The annualised return on equity also increased to 16.6% (December 2021: 14.9%).

Standard Bank Namibia also shook off the adverse impact of Covid-19 in its 2022 year-end results after the bank recorded an increased profit of 70.5% for the year – up from N$366 million to N$624 million. 

This is according to the bank’s annual report for 2022. 


2023-05-05  Correspondent

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