The proposed increase in commercial banks' service fees, for both depositors and borrowers, is not just incongruous but also exploitative, coming at a time when the economy continues to grapple with prolonged high inflation and public trust in the sector remains fragile. According to a report by this daily, the Association of Bankers, Bangladesh (ABB) recently submitted a proposal to the Bangladesh Bank, asking to introduce 14 new service fees and raise the charge for several existing ones. The new fees would include cash withdrawal fees beyond a specified monthly limit, dormant account reviving fee, loan management, monitoring and supervision fee, charges for early settlement of demand and continuous loans, and letter of credit (LC) opening commissions.
If the proposal is approved, bank customers withdrawing their own money more than three times a month have to pay Tk 100 for every withdrawal until the 10th. From the 11th withdrawal, they have to pay Tk 300. In a country where a large number of transactions are still carried out in cash, a Tk 100-300 fee per withdrawal comes off as a penalty for trying to save and keep one’s money safe. This leads to the question: what motivation would low or middle-income customers have to save money in the bank to earn a meagre annual interest of 2-3 percent, when they have to pay hundreds of taka in various bank charges?
The same goes for borrowers who are already facing high interest rates. Introducing new fees would only increase borrowing costs. This would further discourage private credit, which has already been experiencing weak growth in recent years. Besides, our commercial banks already have a bad reputation among rural customers and smaller borrowers, who shy away from these institutions’ numerous stated and hidden fees, documentation requirements, and lengthy bureaucratic procedures. The proposed hike would only drive more of them away to informal lenders. Meanwhile, several large conglomerates are already looking beyond borders to avoid the domestic high cost of borrowing. That queue is likely to grow longer if the proposal is approved. How would that help the already vulnerable banking sector?
It is not a surprise that the reaction to ABB’s proposal has irked both businesses and general customers. While the ABB cited inflation as the reason for their proposed fee hike, they must understand that inflation does not hit an individual earning Tk 30,000 a month the same way as it does a bank that records crores in annual profit. If banks cannot buy printer ink with a portion of that profit and instead need to charge their customers Tk 300 extra for printing a solvency certificate, then the issue is not about inflation adjustment but managing inefficiency. Instead of trying to impose predatory practices on the very people who make their role as financial intermediaries possible, the banks should look inward and cut their administrative costs, close unprofitable branches, and recover defaulted loans.
