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Dhaka Tribune

Banks warned against high service charge from clients

Update : 29 Dec 2015, 09:29 PM

Bangladesh Bank Governor Atiur Rahman has warned all the banks not to take high service charge from their clients.

The governor came up with the warning at a seminar titled “Protection of Consumer Rights in Banking and Financial Sector in Bangladesh” held in the capital yesterday.

Khondkar Ibrahim Khaled, former deputy governor of Bangladesh Bank, presented a keynote paper at the seminar.

Referring clients’ allegations, in his keynote, Khaled blamed the banks for high service charge that they take from their clients to maximise their profits.

Admitting the allegation, the BB governor said: “Some banks are still charging higher in the name of providing services.”

“The annual balance sheets of the banks will be checked to see whether the banks are maintaining a standard service charge. If any bank is found non-compliant with the order, it will be forced to comply with,” he explained.

Citing an example, the BB governor said: “A bank charges for its SMS service from its clients without their consent. The central bank had forced the bank to pay back the money worth Tk16 crore to the clients.”

He said there is an instruction that banks will not charge any fee from the bank job applicants. Though most banks are following the instruction, some are still doing the old practice.

Atiur called for those banks to refrain from charging fees and to follow the instruction.

In his keynote presentation, Ibrahim Khaled, also former chairman of Bangladesh Krishi Bank, said the government recapitalised the state-owned banks by public money which he termed “unethical”, saying that the capital shortfall was caused by corruption and loan scams.

Defending the recapitalisation, the governor said as the government is the owner of the state-run banks, it has the responsibility to meet up the shortfall by injecting fund.

“As a regulator we must have to pressure the government to inject required fund to the state-owned banks.”

Though he admitted that recapitalisation by public money is unethical, the government has to do it as the owner of the banks.

With reference to the neighbouring country, the governor said the Indian government injected around Tk70,000 crore to its state-owned banks while the Bangladesh government needs only Tk5,000 crore.

Mohammed Hossain, former managing director of Sonali Bank, said directors of banks reduce their service charge through coming into a compromise of swapping loans among themselves, but on the other hand they increase the rate of service charge for their clients.

He requested the governor to inquire into what termed “insider abuse” by the directors. 

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