Participants express fear of banks on new BoG product

Accra, Feb. 19, GNA - Expectations of bank charges for the newly introduced Bank of Ghana (BoG) Credit Clearing System to facilitate inter-bank credit transfers among commercial banks dominated a public forum on Thursday.

Participants, though lauding the new product because it would facilitate easy transfer, expressed concerned that commercial banks would use it as one of many means to exploit customers. As a result, some wished the product was made free because, to them, charging fees for the service by the commercial banks would further discourage customers from transacting business with the banks, which already had been criticized for levelling so many bank charges in recent times.

Reacting to the questions, Mr Stephen Tetteh, Senior Manager at the BoG, noted that though the respective banks according to their cost structure would price the charges of the Credit Transfer Voucher, the price would not be that much, compared to other similar services. He said its efficiency and uniqueness, making it the fastest money transfer so far to be introduced with a high tendency to generate competitions among the banks, would even compelled some institutions to offer the service free.

This new Credit Transfer system to be launched next month is a process whereby a payer or sender initiates the movement of money from a bank to an account of a beneficiary in another bank's branch. Until now, credit transfers in the system were run on bilateral basis without formal clearing and settlement time frames. The new credit system would be based on the paper credit transfer voucher and involve multilateral net clearing with settlement in Central Bank funds.

It would be similar to the cheque clearing system, except that it is based on credit push instead of the current debit pull principle. The rationale for its introduction includes reducing the current 95 per cent cash payment transactions, which had dominated Ghana's monetary transactions, offer alternatives to other transfer systems, and to serve as a precursor to an electronic system in the not distant future. The system would be ideal for transferring money to wards in schools, payment of utility bills, salary, fines, charges, penalties, registration fees, VAT and income tax.

"Funds could be transferred from one account to another in different banks and cash could be deposited at a bank for credit to an account held in another bank," he said.

Transfers between outer zones would take a maximum of six days.