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!