The Banking Services (Amendment) Act, 2016

I believe the intent of the act is good, given the fact that banks have sought to impose a heavy burden on the consumers for far too long.

Banks are the only business I know that you lend money to and are charged by the lendee ( bank) to access the money you lend them.

They are also the only business I know that sets the rates at which you lend them money, which they in turn lend to other business.

For the most part, the amendments seem fair, but there is one area that needs to be sorted out and that is schedule 132A  , Section 5  and Twelfth schedule part 3. minimum service package.

The sticking points appears to be the 120 free transactions per customer per year, but as far as I am concerned this is an easy fix.

There are some transaction that uses more resources than others and as such should be priced differently based on the size of the transaction.

The ability to or the consumers willingness to pay should be part of the consideration to arrive at a position so we can get to passing and  implementation of the act.

I am therefore suggesting a tiered fee structure.

Tier 1   Ave accounts  balances less than $100,000 per mth , 120 free transaction per year

Tier 2. Ave account balances $101,000 – $500,000 per mth, 80 free transactions per year

Tier 3. Ave account balances $501,000 – $1,000,000 per mth, 60 free transactions per year.

Tier 4 . Ave account balance > $1,000,000  36 free transactions per year.

This I believe will protect the most vulnerable with the least amount of resources and ability to pay, while allowing those with more resources and a willingness to pay progressively gets less free transaction.

As it relates to dormant account, I believe the act must not waiver on this part as banks should not be allowed to steal money from accounts considered to be dormant. I however have one issue  with the wording of this section Part 7 E, iii and iv. iii says there should be no transaction on the account and iv says the benefits attached to the accounts shall remain.

One benefit attached to an account is the right to earn interest, so if that should remain then there must be a transaction on the account to post that interest. I therefore believes that the wording should be examined further to make those two points do not seem  contradict each other.

The ease at which accounts can be opened and or moved between banks should be examined within the framework of local and international best practices . This is where I believe we can gain a lot . If I am not satisfied with any of the two big banks, I can move my money to another bank that charges me lower fees.

My two cents.

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