Bank charges rise steeply

Absa, for example, has increased its “safekeeping charges” for wills by 28% from R60 to R84 and Nedbank now charges R12.50 per cheque deposit on a credit card balance, a service which used to be free.

In June, Standard Bank's home-loan administration fees skyrocketed, increasing by more than 500%.

Banking ombudsman Clive Pillay, confirming that he had received complaints over recent fee increases, particularly the introduction of a cheque deposit fee for making deposits into a home loan or credit card account.

Pillay said that the National Credit Act allowed a maximum of R50 a month to be charged as service- related fees, which would include cheque deposits.

“Banks already charge about R35 a month in service fees, so they will in fact not be able to levy too many cheque deposit fees,” he said.

Pillay, however, said that banks were allowed to charge cheque deposit fees on accounts that were opened before the NCA came into effect.

The big four banks have increased their fees this year.

Standard Bank's fees went up an average 8.9% in January, Nedbank's average fees increased 8.5% in March, First National Bank's overall fees went up 6.7% in July and Absa increased its fees by an average of about 5% in June.

But Absa, the country's largest bank, also increased fees twice last year. In January it increased fees by an average 4.2% and again in September by another 8.9% .

Absa's managing executive for customer market solutions, Keith McIvor, said that these fee increases were in line with inflation.

“Our market reviews and pricing changes are managed on a continual basis and have in fact been below the prevailing inflation rates at the time for the past number of years,” he said.

Standard Bank spokes-man Ross Lindström said aside from the increase in January, isolated fees had been increased in June.

“One was in certain transaction accounts, two fees for existing customers in home loans, and two for new lending customers,” he said.

The home loan fees referred to by Lindström include an administration fee increase of over 500%, from R5.70 to either R35, R42 or R57, depending on the amount of the loan and whether the account holder had homeowner's insurance with Standard Bank or not.

“Isolated fees were increased in June after taking consideration of the increasing cost of delivery of services and products, and operational risks,” he said.

Other banks have also upped fees for home-loan administration. Absa increased its fees to between R28.50 and R45.60. Nedbank increased fees to between R39.90 and R57 in March.

Nedbank introduced new fees in May this year, including charging R12.50 for payment of card balances by cheque, a service which used to be free.

“We did this in response to the high cost of processing cheques and our drive towards removing paper from our business,” said managing executive for Nedbank Retail Saks Ntombela.

Source: Business Times

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