Lesotho - CBL orders banks to cut charges

MASERU – THE Central Bank of Lesotho (CBL) yesterday directed all commercial banks to cut banking charges.
The charges vary from those associated with opening an account, cash deposit fees, penalty fees, bank statements fees to point of sale fees and credit fees.
Most of these charges will become effective from the 1st of April.

Acting Governor of CBL, Lehlomela Mohapi, said the directives are a result of extensive research and consultations with the banks.
The directives are meant to improve inclusivity, enhance intermediation and competitive pricing of banking products.
“Financial inclusion is a national policy objective. We need to get as many Basotho as possible to consume financial products,” Mohapi said.

The CBL ordered the commercial banks to have the Bothebelele transactional account for low income earners.
To qualify for this account that will have zero charges for opening it, first card issuance, management fees and balance enquiries at Automated Teller Machines (ATM), one will have to earn M3 000 or less.
“The client risk profile rating assessment for KYC requirements shall be applied for this account,” he said.

He said the banks shall promote this account in the same manner and with the same rigour that it promotes other service offerings.
In relation to personal accounts, banks have been told to do away with fees for cash deposits on ATMs.
“The free charge will be applicable to an amount up to a maximum of M3 000 per month,” Mohapi said.

For business accounts only, Small Micro and Medium Enterprises (SMMEs) with an annual turnover of M240 000 will get a single free cash deposit for a maximum of M20 000 per month.
In case deposits are split into smaller amounts, a limit of three cash deposits will be allowed as long as they collectively amount to M20 000.
Mohapi said any amount more than M20 000 per month shall be processed at a standard charge which shall not exceed 0.5 percent of the deposited amount.

Banks have been told to charge nothing above M40 for dishonoured debit order transactions.
For early redemption fees on investment accounts, charges will not exceed M100 000.
Mohapi said the banks shall charge a fee of an amount not exceeding one month interest for early settlement of a loan.
He said the banks have been directed not to charge anything more than M10.00 per page for printed bank statements and for confirmation of banking details.

For loans no other fees will be charged except for initiation fees and monthly administration fees for the provision of credit services and administration of loans.
However, banks may continue to charge any applicable third party charges for the provision of credit services and administration of loans.

Mohapi said initiation fees for personal loans are set at one percent of the loan amount and shall not exceed M300.
Initiation fees for vehicle assets financing are set at one percent of the loan amount and shall not exceed M4000.
Mohapi said initiation fees for property finance are set at one percent of the loan amount and shall not exceed M5000.

He said monthly loan management fees will be capped at M50 regardless of the type of loan.
Nkau Matete, the Managing Director of Nedbank Lesotho, said their clients will have to go to their banks to find out whether they qualify for the Bothebele account or not.
“They need to consult with their banks because of their various needs,” Matete said.

Through the discussion, he said they will be advised depending on what services and conveniences they seek.
Anton Nicolaisen from Standard Lesotho Bank said banks are continuously seeking ways to better serve their clients.
He said they always want to give their clients what is in their best interest, hence even the uptake of this Bothebele account will depend on the client's needs.

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