The Financial Sector Conduct Authority (FSCA) has detected significant disparities in the fees charged by different banks for the same or relatively similar products or services.
The authority has embarked on a project to assess the transactional fee practices across registered banks to determine whether further regulatory or policy interventions are required, finance minister Enoch Godongwana said in a written reply to a parliamentary question by EFF MP Omphile Maotwe who enquired if the Treasury was investigating “exorbitant” bank charges.
The authority also has concerns about the lack of adequate disclosure by some banks of these fees and their poor understanding by customers, the minister said.
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“The FSCA is responsible for overseeing the market conduct of banks, including the extent to which fees and charges imposed by banks are fair and transparent,” Godongwana said.
“Through its ongoing supervisory activity, the FSCA has observed several variations in the pricing approaches and structures between different banks. In some cases, there are significant disparities in fees between banks for the same (or relatively similar) products or services.”
Godongwana noted the FSCA published the conduct standard for banks in 2020, which took effect in July 2021. This introduced requirements for banks to conduct business in a manner that prioritised the fair treatment of financial customers.
The standard stipulated a bank that provides financial products or financial services must ensure the terms, conditions and requirements in a contract between the bank and its retail financial customer, relating to a financial product or financial service, including fees and charges, are not unfair.
“While the conduct standard does not prescribe or stipulate what would constitute an unfair or ‘exorbitant’ fee or charge, banks must be able to demonstrate that the basis for their fees and charges are reasonable and that these fees and charges do not result in unfair outcomes to financial customers. It is on this basis that the FSCA will be conducting the assessment,” the minister said.
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