Competition Commission backs off banks

The Competition Commission is one of the few public bodies here in South Africa that has actually bared its teeth and bitten into corruption.

In the bread industry massive fines were handed out to colluding cartels.

The Commission then set its sights on the banking industry.

They held 101 public hearings with the banks over a 22 month period.

Fin24 brought us an interesting update on the situation that leads with the headline 'SA banks outgun authorities'.

The basic of the story is that apparently the commission has admitted that it does not have the power to compel the banks to change their practises.

The outcome of the report was that the banks were given a list of recommendations to follow from the commission. These dealt with increasing competition in the sector, decreasing charges and greater transparency in pricing.

Here at Justmoney we look at bank charges for a living, and you need a serious amount of time and diligence to even begin to make sense of it.

After months of research we were able to create a bank charges calculator which enables meaningful comparison between the banks and their highly sophisticated offerings.

This calculator was one of the recommendations of the competition commission.

The commission however appears to have lost its teeth.

In the Fin24 story they quote a division manager as saying that the commission 'hope(s) the banks will change their behaviour'.

When pressed on what this meant it was explain that the banking enquiry was not an investigation into 'cartel activity with the purpose of punishing possible offenders'.

This is a basic admission that they can't make the banks do anything.

When the commission report was leaked uncensored to wikileaks (this link is currently being bombed by the Chinese) we could already get a hint that the commission was not going to hold the banks to account.

The 'commercially sensitive' parts of the report which had been leaked were by and large merely examples of massive profiteering on the part of the banks.

Needless to say they were not impressed when the report was hacked.

The original on the competition commission site can be found here.

The commission made a number of recommendations and expressed the view that if the banks were to not take up it's recommendations then they would move to legislate.

However it seems that this is no longer on the cards.

In the interests of the consumer and the long term survival of the banking industry these recommendations should be followed, but more likely we can expect business as usual.

Let's hope that the public discontent with banks that is simmering in other parts of the world does not come home to roost in South Africa. Keep up to date with Justmoney by registering here with us.