CBL directs new pricing for banking products

Irene Seme

Maseru – The Central Bank of Lesotho has issued pricing directives for banks operating in the country. This follows in-depth research work and benchmarking exercises by consultations with the commercial banks in Lesotho. This move was done in accordance with section 71 of the Financial Institutions Act, 2012 which shall be implemented from April 1, 2022.

According to a CBL press statement, the directives are intended to achieve three things, namely; inclusivity, enhanced intermediation and competitive pricing of banking products and services. The statement by CBL outlines that banks should make available a transactional account for members of the public earning a monthly income of M3,000.00 and below. CBL further guides that “the level of income can be verified by payslips or other verifiable sources of income. In addition, respective banks are directed to put in controls that monitor transactions and therefore effectively assist to determine levels of income of account holders.”

The commissioner also directs that these accounts shall be governed by fee structures which include no charges or fee for opening the account, no charges or fees for the first card issuance of this account, no management fees, one free withdrawal from own ATM and cardless withdrawals. No charges for balance inquiries at ATMs including mini statements, from branches, mobile banking and bank statements from internet banking.

CBL further directs that there shall be no charges for cash deposits on personal accounts on ATMs and that the free charges shall be applicable to an amount up to a maximum of M3, 000.00 per month. For business accounts, the directive is that “there shall be one free cash deposit for all cash deposits valued at an equivalent to 20,000.00 per month into accounts of SMME businesses with an annual account transaction turnover of at most M240,000.00.”

“Any amount more than M20,000.00 per month shall be processed at standard charges which shall not exceed 0.5 per cent of the deposited amount,” read the statement adding that for penalty fees the banks shall charge an amount not exceeding M40 for tainted debit order transactions. There will also be a change on early redemption fees on investment accounts. Other services that will be affected include internet banking, Point of Sales (POS), prime lending rates, deposits rates, credits and disclosure in respect of fees and charges. Contacted for comment, the Standard Lesotho Bank Public Relations Officer Manyathela Kheleli said this is an industrywide directive that affects all the four banks in Lesotho.

“These banks have what is called the Bankers Association of Lesotho and as these directives are fairly new, the banks are still conversing on them and will make a collective response after looking at the pros and cons of the given directives,” Kheleli said. Asked if as the banks they stand a chance to query the directives, Kheleli said there is a consultative process with the CBL and the banks to discuss the way forward.

“There has to be consensus and commitment from all the banks on how then do we want to respond as a collective because each bank first has to look at how the directives affect their products. It is only then that we can voice out collectively,” Kheleli said. Additionally, the commissioner’s statement reads “unless stated otherwise in this directive, all provisions of this Directive shall be effective and in operation from April 01, 2022. It shall subsist for a period of 24 months to March 31, 2024 at which it may be revised or upheld.”