Malawi banks are failing customers: RBM should step in
Generally, the quality of service offered by banks has deteriorated over the past few years. Some of the contributing factors are lack of service expansion in light of growing clientele and the narrow products offered. The services are so appalling that one has to wait for long hours to be served. Sometimes queues are so long that customers just give up and return the following day.
Banks have become like public hospitals and clinics where long queues and slow service are the order of the day.
All this poor service is happening at the back of billions of kwacha that banks make. One wonders why banks do not plough back the obscene profits they make to improve services and introduce innovative products such as deposit ATMs.
National Bank is one example where services are poor. It has only one branch in Mzuzu.
One has just to be prepared for physical and mental capacity to be in the queue for a long time. It is even worse when it is month end, Monday, Saturday or for those who want to open bank accounts or fixed deposits.
Customers can wait for two hours or more before they are served. As if this is not enough torture, the bank does not have adequate chairs for people to sit on. Those who cannot manage to stand for too long and unable to secure a seat, sit on the floor.
This sad state of affairs points to lack of strategic leadership in the bank. The population of Mzuzu City is growing and you cannot have one branch that serves the whole city and surrounding areas of Mzimba such as Ekwendeni, Mpherembe, Kafukule and Euthini. Even parts of Nkhata Bay are served by this branch. Why not open more branches?
There is pressure to access services as customers from Mzuzu and other areas flock to this one branch. This pressure has made the bank to be inefficient. This has been going on for years and the situation is getting worse as more people are accessing bank services such as opening a bank account, applying for a loan or ATM card etc.
The Reserve Bank of Malawi is equally failing Malawians. They should be discussing with commercial banks how they can improve their services. Banks are in business and they exist to service customers and make profits.
However, they are regulated. Reserve Bank, as the regulator of the financial sector, have leeway to make regulations that are in the interest of the public. For example, the
Reserve Bank as supervisor of banks can make regulations that are designed to improve service delivery. They can make regulations that require banks with a certain level of capital to have two or more branches in cities to serve customers efficiently. They can also discuss with banks to install ATMs that accept cash deposits to reduce congestion in banking halls.
Such a facility is very convenient as customers can deposit money anytime because it operates 7/24. Ways should also be found to operate mobile banks in rural areas.
The Reserve Bank should not turn a blind eye to the poor services banks offer customers. Banks should adopt new banking technology, provide better facilities for customers and serve them efficiently.
Malawian banks are too conservative and greedy and will not change unless they are pushed. Reserve Bank should spearhead that change and innovation. If the laisser-faire stance of just watching when things are going wrong, Reserve Bank will be reduced to a regulator that has no real relevance to Malawians and banks will continue to shortchange their customers.
Already the central bank is failing to stop commercial banks from exploiting Malawians to reduce interest rate spreads. Commercial banks continue to give customers very low return on their investment. Yet they charge very high lending rates.
It is high time the Reserve Bank stepped in so that the colossal profits that banks make are used to improve service delivery. Why is Malawi so backward in everything? It is a shame!
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It all originates from our corrupt mind set. We really need to change the attitude of jealous, envy and corruption if we need to grow our nation into a lovely and caring destiny for all. Banks were supposed to be the patrons of transparency and good customer care. Banks need to be supportive to their clients than being reapers of clients’ had earned fortunes. As savers we use banks to secure our money and we do not expect them to use any financial control gaps to steal from us. Instead of embarking on technological innovations to improve their services, they are busy innovating ways on how to steal from customers.
Unfortunately, our voice is never heard at all. We can shout or cry, write or demonstrate, but nothing will change.
The Reserve Bank has also turned up very, very useless. I think they are a corrupt lot. In the Old Good Days, we had what was called ” Bank Supervision” as a Department. They used to go to these Commercial Banks to really supervise them. The accountants in the Commercial Banks used to sit on an elevated chairs to watch over the customers.
I correctly remember during the time of MR. G. O . Sibweza ( inshort GOS) the team went to one of the Commercial Banks and found these nuisance long ques . The accountant was ordered to increase the number of cashiers there and then. These days nothing of that sort can happen. The question is ” Has the Banking Act that empowers the RBM to supervise these Banks changed?”
Today going to the Bank is at owners risk. Forget about coming back to the office. Who can hear us????????
Banks are criminals. You trust them with your money, they don’t give you interest and they actually charge high bank charges just so you can have an account. But without an account you can’t get many jobs. Yet ask them for money and they charge massive interest. Interest = usury = massive sin per the Bible! To Hell with banks.
indeed this is true my National bank in Mzuzu is only one but needs to strategically put more ATM such that we do not fail to access our cash.
That’s why some of us when we find a chance of withdrawing money from account we draw out all leaving to the account nothing and invest into tangible things than giving our banks business which later do not think about how to serve us swiftly.
Heheheheee. Bank tailors at FMB in Liwonde can stop serving customers, you find them answering personnal phone calls or showing each other whatsApp new posts. Kuti koma yaaah tili mu ufulu wa ma bank.
What the writer has said is nothing new. Customers are treated like door mats.
Recall a few years ago, the banks applied for duty free status for importing ATM machines citing that they want to extend value added services to the customers. The tax payer footed the bill for the duty exemption. ATM are mainly in urban centres where middle income group use them and this generates a lot of income by way of charges for the banks
If you go back to the times ( about 7 years agao) when Bankers Association publicly said that once MICR cheques are implemented, the customer will get credit the same day. What happened, as customer we still wait for four days to get a credit whilst the interbank settlement is done the same day, thereby the banks enjoying the customers money. All countries that have MICR are able to credit their clients account the same day, these countries have million of cheque cleared each day, whereas in Malawi, you hardly have less than 100,00 cheque or clearing and it takes four days . What is the point in paying Mk 13,600-00 for a 100 leaf MICR cheque book. Day light robbery
If you recall, whenever there was forex shortage, there would be rationing for clients , but banks had millions of dollars for importing equipment for their IT and ATM and yet they are unable to offer basic services
RBM has no teeth to ask the banks to pull up their socks. They will just penalise the banks a little bit here and there during routine inspection , get some free lunch
The banks are so powerful that they were able to revoke the VAT rules implemented for providing sevices
Malawian banks are a nuisance, treating customers as beggers. Mxiew1
Poor Customer Care at the Banks is appalling. One tends to wonder whether it makes sense nowadays to put your money in the bank. AT the rate at which the cities and towns are growing, the banks are still operating like they were in the 1960s.
And nobody mentions that it takes 5 days for a bank to clear a cheque! How is this possible when all banks are linked electronically? A cheque is legal tender and should be cleared immediately! I just paid 50,000 MK for a special release of a cheque, and I am punished for that banks failure to get their act together.
investing your money with the banks is the oldest and poor decision one can make with his money. Its in fact investment option for the brain dead
Its really a sad development, RBM should engage Banks on high interest rates they are charging as well as quality of services this banks are offering.
My free advice is that its better to bank with these so called small banks, they offer better personal banking services. they even know you personally thus enough reason for one to strike a better deal with them
Banks treat particularly poor people like rats. Upmarket people are asked to pay something which I call bribe for better services while poor people who can’t afford the bribery fee rot in long queues.
They keep you waiting as if you have no other economic thing to do. 30 to 1hr you are kept in bank on que is enough to make a few kwachas out there.
I couldn’t have agreed with the writer more those are important issues raised.
The main problem we have as a country is that we sit quite for far way too long. We even have to plead for services that we are paying for and yet the banks are making the profits that can only be dreamt of by other players in our small economy. I always wonder each time I visit home why things are still being done the same way by these banks etc whilst the need of our population has greatly shifted. To think that you can have one branch to service a city as small as Mzuzu may be and also other surrounding districts is an insult of highest order to Malawians.
As I have argued before on this and other forums for Malawi as a country to move forward we need a private sector that is responsive to the need of the population at affordable and sustainable scale and banks do play a critical role in getting any economy moving forward. As of our Govt they need to play their critical role of creating a conducive environment for us all to succeed not just for banks to make unjustifiable profits but for its citizenry to achieve meaningful economic participation and create wealth.
As a nation I strongly believe we can develop if we get each player to play their roles efficiently and without too much greed. The repayments rates people are being charged on loans obtained from these banks is insane yet you deposit money with them you don’t get anything in return but year after year we hear how much profits the banks have made and our “Reserve Bank” just sits there and do nothing to say well done to them, then ask them questions as to how positively has your services impacted on the citizens of this nation. I am not against profit making as that’s what capitalism is all about but that must be done on a sustainable rate so that those who contribute to the growth of business must also be able to come back to you and say Thanks…..but what we are seeing right now more and more people are defaulting on their loans and end up loosing their properties not because they had no desire to repay the loans but the repayment rates are just too much for people to afford in a long run hence making it unsustainable.
It is time to sober up
The Malawi Govt is supposed to establish Development Bank so that these hostile commercial banks must have pressure to service customers better. We are making a headway a an economy coz we have placed the banking sector fully in the hands of the private players. All these banks are there for profits not looking at Malawians’ welfare. That’s loans repayment defaulters are just many as a result of high interest rates imposed by these commercial banks. The regulator (RBM) is asleep now hence the reason for these banks to rip Malawians. Banks in Malawi have a major influence on the small economy and they manipulate economic issues in Malawi coz they are not closely monitored
101% true