THE news that the Bank of Zambia is working on regulation of high bank charges brings good news for those championing financial inclusion.Why should people who voluntarily choose to use financial institutions be subjected to high charges?
Is that not working backwards regarding the national financial inclusion strategy that the country has embarked on for the years 2017 to 2022, which, among others, seeks to broaden access to quality and affordable financial services?
The announcement by the Minister of Finance, Margaret Mwanakatwe, in Parliament needs applauding from every well-meaning Zambian.
The importance of using banking channels when handling money cannot be overemphasised.
This is because of the many disadvantages that having cash, as opposed to banking, has. People have been robbed of their hard earned income when they move with cash, losing it, including through fire and other unpleasant incidences.
Further, we hear of people that have been swindled out of their money by crooks who give them fake notes, with some even ending up being arrested because of having received fake money.
Because of all this, many organisations and banking institutions have been working on ensuring that people engage in cashless transactions and deal with such disadvantages of using cash for transactions.
For example, the Financial Sector Deepening Zambia is an organisation that seeks to expand and deepen the financial market throughout Zambia.
It has been working closely with the banks and other financial service providers as well as mobile networks operators all in a bid to ensure that people become banked. But then, for what use will it be to put money in a bank if customers will be subjected to high service fees?
The cost of withdrawing cash has been on the increase, monthly charges for most banks are still high, and also levying of high charges for over-the counter transactions is another issue that is affecting the banking choice of individuals.
In as much as people would want to keep their money safe, they do not want to keep losing it through high bank charges that they are subjected to.
What the regulation therefore may seek to achieve will be a positive indicator towards achieving the financial inclusion objective of the Government.
People may now be comfortable to safely keep their money in a bank knowing that they will incur less costs. What this also means is that, if more people are attracted to using banking products, the commercial banks will have more money to lend to individuals, who will then invest the funds in businesses and the end result is increased productivity, which brings about economic growth.
Further, digital migration to financial products from traditional cash may be escalated because high service charges have been a repelling factor to use of financial products.
It is therefore important that this announced regulation is quickly enforced to ensure that banking products become more attractive to the masses, who usually fear using financial services due to costs incurred in sustaining their accounts.