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Banks faulted on Natswitch

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A consumer rights activist has raised concern that the banking sector could be defeating the whole purpose of setting up the National Switch Centre (Natswitch) following the high charges some banks are imposing on their customers for encashments made from automated teller machines (ATMs) of other banks.

The Reserve Bank of Malawi recently announced that all commercial banks ATMs have been interconnected through the National Switch except the New Finance Bank which is expected to be integrated by June 1, 2016.

Natswitch, among other things, allows autoteller card holders to cash from ATM machines of any bank in addition to that of their own bank.

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But Consumers Association of Malawi (Cama) Executive Director John Kapito has described the fees banks are charging their customers to access the service as exorbitant considering that government initiated the establishment of the National Switch to ease access to financial services by account holders and to accelerate Malawi government’s financial inclusion strategy.

A statement RBM released last week shows that while customers of FMB, CDH, OIBM, Indebank, FDH, MSB, NBS and Ecobank are being asked to pay K120 per cash withdrawal using another bank’s ATM, Standard Bank is charging its customers K288 per cash withdrawal while Nedbank customers pay K350 for accessing funds through another bank’s ATM. Customers of National Bank of Malawi are paying K120 per cash withdrawal for accessing ATMs belonging to MSB, OIBM and Indebank but pay K187.50 for accessing services of the other banks.

And Kapito says looking at the fee structure, it is better for consumers to continue using their own bank’s ATMs until a move is made to harmonise the charges.

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“The real value of the National Switch to the Malawian consumer has been eroded,” he said.

Kapito says Cama will engage RBM and the Bankers Association of Malawi to discuss how the issue can be resolved going forward.

Meanwhile, Director of Banking Supervision at the Reserve Bank of Malawi Eldin Mlelemba says RBM is in constant contact with commercial banks to ensure that their charges are affordable to Malawians, especially those living in rural areas.

“If the fees are too high, it would work against Malawi government’s financial inclusion agenda to have more people banked,” he said.

Government through RBM initiated the establishment of National Switch with funding from the World Bank under the Financial Sector Technical Assistance Project to accelerate Malawi government’s financial inclusion strategy which seeks to have at least 40 percent of the population having access to financial services.

In addition to ATM transactions, Natswitch also incorporates Point Of Sale transactions, mobile-banking, electronic-banking transactions, Visa and MasterCard Gateway as well as over-the-counter transactions.

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