Banking Institutions Reimburse Customers E5 Million Following Overcharges 

By Ntokozo Nkambule

The Central Bank of Eswatini (CBE) has introduced a robust price review for the banking industry to ensure that banks charge fair fees for their products and services.

This was divulged by the Governor of the CBE Dr. Phil Mnisi during the 2023 Governor’s Annual Monetary Policy Statement.

In his address, Mnisi noted that as the CBE they continue to strengthen supervision for market conduct and consumer protection.

He said this includes monitoring banks’ compliance with the Consumer Credit Act in line with the 2021 amendment.

“The Bank ensured the reimbursement to customers pertaining to overcharges totaling approximately E5 million including refunds flowing from the mortgage investigation. The Bank also conducted its inaugural market conduct and consumer protection on-site examination in one of the banks.”

The CBE instituted an investigation or review into mortgage loan processes in 2019 following complaints by the public. 

The review included mortgage-based funding processes and allegations of irregular practices by stakeholders in mortgage lending with respect to repossession of consumer practices.

The CBE states in its report that the forensic investigation conducted by SNG Grant & Thornton SA on banks’ mortgage foreclosure processes in Eswatini revealed some regulatory gaps. 

As a result, the CBE has developed a draft Arrears and Foreclosure Guideline that seeks to set out minimum standards that banks must observe when dealing with customers in arrears and under the foreclosure processes to close the identified regulatory gaps.

The Governor further noted that in December 2022 it directed banks to provide free monthly statements on all types of accounts as well as reducing the statement charge per page on subsequent statements in a month.

“The Bank also directed banking institutions to reduce loan initiation fees for individuals and SMEs as they were found to be exorbitant when compared with their CMA counterparts.”

The Bank continues “All banks have since developed and introduced a No-Frills account. Minimum features for a No-Frills account include issuing of an ATM/Debit card, several free withdrawals per month, and no periodic maintenance or administration fees.”

The Bank argues that it has encouraged banks to implement these changes in an attempt to encourage banking institutions to have an account targeting the low-income segment (earning E5 000 or less) which will help the country achieve its goal of increased financial inclusion.

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