What do you know about your bank account?

The Big Breakfast team on Capital Radio, during their daily quick-fire phone-in quiz conducted over a period of one week, requested listeners to call in and state the full name of Nigeria’s president.

The number of callers who got it wrong shocked me. Being on the road heading to school, I decided to conduct my own random survey. I stopped several times and asked people walking by for the answer. On arrival to school, I asked gatekeepers and other support staff. I also asked about five students that I chanced upon. In total, 26 people got it wrong in the 20-minute survey. Thankfully, none of the teaching staff participated. It is fine not to know the president of Nigeria to hand. However, it is surprising that regular listeners would fail to get the answer for over a week. Surely by the time one calls in, they should be better prepared.

In that same week, one of the Kampala-based radio stations reported that a Chinese man had saved 150kg of coins from an early age that he had used to buy a diamond ring to propose to a childhood sweetheart. Strangely, we are capable of remembering all sorts of junk and trivia but are negligent about what we must know.

Many of us do not pay good attention to our own personal bank statements. As a school principal, I am contracted and obliged to study the institution’s statements diligently. Failure to do so would be catastrophic since schools run on collections made in the first month of the term and private schools are now required to pay taxes.

So, I am aware that my school has paid over Shs 30m in bank charges since January! Recently I have had to take a careful look at my own personal account. This was after a cheque I had written was bounced yet my bank had not called to inform me.

They usually call for nearly everything else. Embarrassed, I set about finding the cause of the rejected payment. My bank wrote back informing me that some small print in a contract obliges me to buy insurance in October.

Consequently, a payment that should have been made in October last year was effected in June without any notice. Worse still, I did not partake in choosing the insurance policy that costs Shs 1m!

As if to add salt to injury, the bank charged me Shs 150,000 for the unpaid cheque. A month after my complaint, I have received a copy of the insurance policy. I intend to find out if it is worth such a lot of money.

Founding Kigo Thinker Norah Owaraga details in a blog posted in August 2014 that in 2010/11, her bank charged her for making deposits, withdrawing monies, internal or external transfers and for using the ATM service in addition to the regular monthly service fee. When she studied her statements closely, she found out that charges had nearly doubled in a period of seven months! The original bank rate was re-instated after she met with a local bank manager but whatever had been taken was never returned similar to my case!

Right now all banks are under immense pressure and it is surprising that many are still making huge profits. However, for how long can they fight off the mobile money platforms that hold vast amounts of money but without strong regulation?

In 2010 telecoms held Shs 900m but in 2014, transactions were over Shs 20 trillion! Banks are still at five million clients whereas it is now 20 million transacting and keeping money on their phones. It also helps that mobile money charges are very clear.

Another threat to banks is the recent increase of the CBR, which means that loans are going to be expensive again! Are we heading for the financial troubles of 2011 once again? The shilling is weak, sales in many sectors are down, investors are wary and the 2016 money-guzzling election is looming.

There is stiff competition within the banking sector and ironically, the telecom money industry has helped in many ways for example by reducing the high-handedness of commercial banks’ personnel.

It is now common for your local bank manager to call or email to iron out a grievance as far as possible. Perhaps the backroom senior banking officers need to take lessons from their front office soldiers in the local branches that usually face customers’ fire!

In the meantime, we must follow Owaraga’s advice in her blog: Lesson 1: It is important for one to pay attention to what bankers are doing with the money given them to hold in trust. Lesson 2: It is even more important for one to pay particular attention to what bankers are charging one for borrowing other people’s money. Lesson 3: Banks must care some more!


The author is one of the founding Kigo Thinkers.


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