Bank Charges Up By 100%

Banks in the country have began charging almost 100 percent increase in tariffs for maintenance of personal and corporate current accounts as well as other charges, Business Finder understands.

The financial intermediaries say the increases have become necessary because of rising cost of operations and increase in taxes.

Even though some banks are yet to implement new charges, most of them have adjusted their tariffs upwards in consonance with rising business costs.  

This paper’s checks revealed that some banks which used to charge GH¢5 for maintenance of personal current accounts are now charging GH¢15 per month, and those which use to charge GH¢20 for corporate current accounts are now going for about GH¢45 per month. These charges exclude others such as cheque clearing and printing of account statements.

Depending on the number of transactions for the month the charges could go up as high as GH¢300.

The banks that effected the biggest increment are mainly in the tier one and tier two categories. However, some tier three and tier four banks have also adjusted their tariffs up significantly.

According to the pwc 2014 Banking Survey, Eobank Ghana, GCB, Stanchart, Stanbic, Barclays, Zenith and Fidelity Bank made up of the tier one category while the tier two banks are UBA, ADB, CAL, UT, uniBank and NIB.

Other banks have also consolidated all their charges including monthly account maintenance, account statements, cheque clearing, interbank transfers among others. This means that irrespective of the number of transactions a client does within a month, the same charges apply.

In this regard, banks that used to charge GH¢5 for personal current account are now charging about GH¢20 whilst those charging GH¢50 for corporate current account are now charging about GH¢250 per month.

This however excludes cheque book charges and other levies.

Charges for loan processing and facility fees have also been adjusted upwards slightly to make way for increasing cost of capital.

Importantly, banks see fees and commissions as very critical in their overall operating income.

For savings accounts, the average interest paid on it is about 7.0 percent while some banks pay as less as 4 percent interest.

With regard to time deposits, some banks pay as less as 10 percent for one month tenor, 12 percent for 60 days, 14 percent for 91 days and 16 percent for 182-days. Others also pay as high as 13 percent for one month tenor, 15 percent for 60 days, 18 percent for 91 days and 20 percent for 182-days.

For loans, average lending rate is about 28 percent despite some base rates being quoted under 20 percent.

According to the 2015 Financial Stability Report, banks made GH¢1.08 billion from fees and commissions alone, about 22.0 percent growth over the previous year.

Interest income constituted 51.5 percent of total income in December 2015 compared with 45.5 percent in December 2014.

Investment income share of 29.3 percent of total income in December 2015 was marginally above the 29.2 percent recorded in December 2014.

However, the share of income from fees and commission declined to 11.6 percent in December 2015 from 12.8 percent in December 2014.