The Governor of the Reserve Bank, Tito Mboweni, has recently made comments in public about the gap between the Repo rate and the Prime rate. The banks had immediately responded by calling for a meeting with The Guv. This is now going to happen, on Thursday 21st May 2009, The Guv and the banks will meet. For dinner. The comments about the rate spread were made by Mboweni at the last Monetary Policy Review. So what should Tito tell them?
- I don't pay enough bank charges!
- Please can you increase the interest rate?
- I don't want to compare banks
Well you could tell Tito to tell the banks that or you could tell him what you really think that he should be telling the banks. The banks seem to be of the opinion that the 3.5 percent spread was expected of them and are now pleading ignorance to the cause of these comments made by Mboweni. This is why The Guv is meeting with them. So they can clarify the situation. Well here is a chance for you to clarify your situation. Clicking on this link will put you in touch with Ms Mpho Mtimkulu She is the personal assistant to Tito Mboweni at the Reserve Bank. Let her know what you think Tito should be saying.
A more competitive position on the gap between Repo and Prime would go a long way into opening up the banking market here, whereby there would be real differences charged by the banks and you would be able to make a more meaningful comparison between them. If you saw that a bank was offering a better rate you would be tempted to change banks. The banking market in South Africa is very static and customers do not easily or readily change banks. So although it may seem that a bit more competition between the banks would be a good thing, would consumers actually vote with their feet and move over to another bank if it was offering a better deal?
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