My K100 Take on BSP’s Banking Fees Hike

2 11 2010

Effective as of today, Monday 1st November 2010, the Bank South Pacific has increased its retail banking fees to what can be compared to as broad daylight robbery.

Now, let us get this into perspective. Say if I am planning on saving K100 per fortnight over the period of one year. Ideally this would see me amass a total sum of K2600 if I were to say, put it in a cash-box/safe or hide it in a hole in the ground.

Then there is the alternative of putting that money into some form of investment in the form of a business venture. There is a good chance of making some good money out of this investment capital. This would see this figure increase dramatically given ones effort into strong marketing and good business sense. For the sake of this argument, let us throw a figure to this alternative scenario and give a range of from, say K3000 – K5000, give or take. Or even more. Of course the risk of losing that money would also be considerably increased from the “cash-box” scenario as described earlier.

But if I decide to save this money with “our very own” Bank South Pacific, this is what I would be looking at with the current banking fees of a Kundu Saver Account.

Working with the same K100 per fortnight scenario, after the K3 deposit fee and the fortnightly account fee of K1.50, the money that actually gets saved would be K95.50. (Cheque deposits would actually attract a fee of K2 so the amount saved would be even less at K93.50).

At year’s end, I’d be left with K2483. Throw in the compounded 0.15% interest and we would end up with K2486.71. That’s K113.29 less than our “cash-box” theory.

Not bad if we can simply say this is the services fee for safekeeping that money but bear in mind, this is a pay-per-use system in that an increase in the number of transactions is bound to increase the total amount in fees being paid, thus the money I end up with come the end of the year would turn out to be even less than from the math above.

The moral of the story is that Bank South Pacific has put up its hand once again to screw over the everyday people of this country. After all, it seems everybody else from corrupt politicians to bureaucrats and multinationals want to screw over the small people so why can’t BSP get in on the act, right!

In fact, BSP has been gradually increasing these fees for a while now as elaborately outlined by Tavurvur in his post Bank South Pacific’s Immoral & Draconian Retail ‘Service’ Fees.

I am now left with no choice but to pull the plug on my account from BSP and seek other means of saving my hard-earned money. Even a hole in the ground holds more promise than “your bank.”

~ero~

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2 responses

3 11 2010
dreamzmedia

Traditionally banks make their money through their loan book, foreign exchange gains and the treasury. Making most of it through fees portrays a lack of initiative and business foresight.
BSP has excess liquidity which it can’t lend out termed ‘lazy capital’. With recent lobbying by the union to look after better its staff and the subsequent raise in employee entitlements, an increase in overhead costs as a result of an influx of ‘old’ foreign expats, go green campaign and re-branding, its earnings cannot sustain these costs and follow the profit trend.
The easiest way to solve this is to raise fees across the board and remember this is the second raise in fees in less than 12 months.
This borders on theft!

Charles Lee

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3 11 2010
dreamzmedia

I very much like this man’s short yet analytical discourse on this subject. 🙂

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