At the St Mary’s College Prizegiving ceremony held in 1991, the former principal of St Joseph’s Convent, Sister Paul d’Ornellas, gave the feature address which emphasised the importance of having...
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Banks defending the indefensible
The President of the Bankers Association has defended the fees charged by putting forward that the banks are entitled to fees for services. This is disingenuous.
The rate paid on savings accounts is so low (below one per cent per annum) it is not worth mentioning. Banks hold one third of their deposits in these accounts, close to forty per cent on non-interest bearing accounts, and they charge the typical consumer more than seven per cent per annum on personal loans. And they still feel entitled to charge monthly fees of as much as $25.
Up to the 1980s bank never charged a monthly fee for the maintenance of a savings account. Customers paid per transaction on non interest bearing chequeing accounts with free entries based on the minimum balance.
Banks do incur a high cost to provide services such as ATMs, and it would be reasonable therefore to charge a small transaction fee, rather than for transactions at the teller, known to be less costly. However, an ATM actually pays for itself by reducing the number of tellers.
Regarding the comment by the Joint Select Committee of Parliament that the total fees earned by banks are high, it is worthwhile to point out that fees charged to businesses may be included.