Economic consumers in Ghana have in the the latest earlier endured distasteful therapy at the fingers offinancial company companies.
This has happened since there is gross disregard for economical customer security in Ghana.
With out mincing terms, this unsatisfactory condition of affairs can be pinned firmly at the doorstep of the Financial institution of Ghana, which is at the moment underneath the leadership of Dr. Ernest Addison.
Over the several years, some financial establishments in Ghana have egregiously exploited individuals by suffocating them with unconscionable loan phrases, given shoppers deceptive details about products pricing, and unsuccessful to disclose crucial info about pitfalls affiliated with goods offered to people, amid some others.
Also, quite a few countless numbers of depositors have misplaced their total lifestyle cost savings as a outcome of unlicensed economic establishments being allowed to freely operate.
In a very well functioning monetary technique that prioritizes consumer defense, the circumstances described previously mentioned will not be authorized to happen or permitted to go unpunished.
Since assuming office in April 2017, Governor Ernest Addison cannot be credited with any deliberate coverage intervention aimed at proactively advancing the interests of economic individuals.
This is in spite of the actuality that, Part 3(2)(d) of the Financial institutions and Specialised Deposit-Taking Establishments Act, 2016 (Act 930) destinations an obligation on the Bank of Ghana to “develop proper buyer defense actions to assure that the pursuits of clients of the banks and the specialised deposit-taking institutions are adequately protected”.
Sadly, not even the coronavirus pandemic which has introduced prevalent difficulties has succeeded in finding the Lender of Ghana to spot consumer protection on the entrance burner.
While regulators and federal government companies in other jurisdictions are actively foremost the charge to make sure financial buyers are provided critically required reliefs to enable them navigate the coronavirus pandemic, authorities in Ghana have adopted a passive and disinterested strategy.
In Egypt, the Central Financial institution of Egypt (CBE) has instructed banking companies to cancel ATM withdrawal fees and points of sale (POS) costs and commissions for 6 months. In addition, the CBE has instructed banking companies to give 6 months repayment getaway to people and firms impacted by Covid-19.
The CBE has also instructed the suspension of late fees (penalty interest). Also, in an effort to reduce hard cash dealing with, all bank transfers inside of Egypt have been exempted from fees and costs.
In the United Kingdom, the Monetary Carry out Authority (FCA) has confirmed “a offer of specific momentary actions to aid men and women with some of the most normally utilized customer credit products”.
The FCA says: “we know many men and women are struggling money pressures brought on as a end result of the coronavirus pandemic. The steps we have introduced are intended to give persons impacted with limited-phrase money guidance via what could be a incredibly challenging time”.
In the United States of The usa, the Federal Housing Finance Company (FHFA) has been proactive in making certain shoppers are afforded peace of intellect all through the coronavirus pandemic.
The FHFA has introduced a aid package that the establishments it regulates have made obtainable to individuals.
In addition, it has offered in depth details to consumers on the techniques they need to have to consider to access the reliefs, or to not incur late costs (penalty curiosity), or to be certain legal proceedings that could lead to repossessions are suspended.
A prevalent thread that runs by way of the examples enumerated over is deliberate steps from regulators aimed at making certain they proactively winner the interests of buyers.
What do we see in Ghana? The Lender of Ghana has determined to go away people at the mercy of the economical institutions. Economical establishments are at liberty to deal with individuals as they wish.
Lots of individuals are narrating tales of how monetary establishments are fleecing them and harassing them to repay financial loans even though they have lost their cash flow owing to Covid-19.
For instance, Financial institutions keep on to deduct account routine maintenance expenses from customers’ accounts.
Even when buyers do not have income in the account, the banking institutions even now debit the account so that when the consumer receives funds through the account, the technique will deduct its expenses in advance of the purchaser has access to the stability.
Why should really banking institutions in Ghana be authorized to do this to very poor prospects for the duration of this kind of a world wide pandemic? Why just cannot the Lender of Ghana stick to the example of the Central Bank of Egypt and terminate these types of charges?
At the end of April 2020, banks debited borrowing customers’ accounts with loan repayments this sort of that, clients who have shed their careers or corporations and do not have ample dollars to fund their accounts have had their accounts thrown into damaging or have the repayments hanging on their accounts.
This kind of customers have as a result long gone into arrears on their financial loans and will go through penalty desire.
Why should the Lender of Ghana permit this to materialize? Why is it challenging for the Bank of Ghana to instruct all financial institutions to present repayment holidays to buyers who require it, just like the FCA has finished?
Why is the Bank of Ghana however allowing banks and MoMo operators to demand customers for area transfers when it has been recognized that managing dollars perhaps exposes us to the coronavirus?
Similarly, why are financial institutions in Ghana being permitted to levy ATM withdrawal rates and regional card transaction expenses throughout this pandemic? Why need to the money institutions’ parochial income motives be authorized to trump buyer basic safety?
Definitely, it mustn’t be tricky for the Bank of Ghana to abide by the lead of the Central Bank of Egypt and instruct all financial institutions to suspend such charges forthwith.
What should really be the way forward in Ghana? From the foregoing, it is obvious that Governor Ernest Addison requires to urgently and proactively leverage the COVID-19 pandemic to show that the curiosity of individuals is a priority for him and for the Bank of Ghana.
Governor Ernest Addison must guide from the entrance in the hard work to get financial institutions to provide critically required reduction to people.
As has been proposed by the Alliance for Fiscal Buyer Defense (AFCOP) and claimed extensively in the media, Governor Ernest Addison and the Financial institution of Ghana should urgently take into consideration applying the subsequent 5 measures to give aid to shoppers:
Initially of, he ought to immediate all Banks and SDIs to promptly suspend account routine maintenance costs and/or fee on turnover (COT) fees for all personalized and SME customers.
Secondly, the Governor wants to direct all Banks and SDIs to instantly suspend all cards/ATM costs (issuance charge, maintenance fee, withdrawal rate and many others.) for all individual and SME consumers
Also, he have to immediate all Banking companies and SDIs to quickly provide a minimum amount of 3 months compensation vacation (principal and fascination) to particular and SME borrowing shoppers impacted by COVID-19
Moreover, the Governor requirements to immediate all Cellular Revenue Operators to immediately provide a least of 3 months reimbursement holiday (both of those principal and fascination) to all MOMO bank loan buyers
And very last but not the minimum, Governor Addison have to immediate all Mobile Revenue Operators to immediately suspend transfer costs for all amounts. The proactive involvement of the regulator is the only way consumers can be confident that reliefs that provide serious rewards to them are available and are essentially carried out by the fiscal establishments.
Woelinam Dogboe is the Convener of the Alliance for Economic Consumer Protection (AFCOP). He is a Chartered Banker and Management Expert.