The Bank of Namibia (BoN) says it is awaiting the amendment and implementation of the Banking Institutions Bill which is yet to be tabled in parliament to mitigate high rates and charges by commercial banks.
Governor of the Bank of Namibia Johannes !Gawaxab said the central bank currently has limited power to regulate commercial banks interest rates and fees, however with the approval of the bill these will be possible.
“Currently, there are no laws regarding this. Therefore, we are actively working towards obtaining that authority through parliamentary processes so that we can instruct the banks to lower their rates. We aim to have control over this, but at the moment, our control is limited,” he told The Brief after the Monetary Policy announcement on Wednesday.
Meanwhile, BoN Director of Strategic Communications and International Relations, Kazembire Zemburuka said the Bank continues to explore ways to ensure that financial services are affordable and accessible to the average Namibian citizen.
This comes after BoN has been accused of acting in the best interest of commercial banks and aiding them in continuing to provide discriminatory services, overcharging, and over-profiteering.
As a result, interest rates are said to be plummeting for people and they are becoming poor, whilst the banks are recording profit surges.
“While the Bank is cognisant of sentiments that the banking sector is over-profitable, the public should be reminded that a healthy banking sector contributes to the stability and soundness of the financial system as a whole.
Furthermore, the Bank continues to explore ways to ensure that financial services are affordable and accessible to the average Namibian citizen. For this reason, the Banking Institutions Bill, which will soon be tabled in parliament, will make provision for regulating fees and charges in the public interest,” said Zemburuka.
The Director claimed that the bank continually monitors and reviews the efficacy of the regulatory framework to ensure that it is adequate to protect customers from commercial banks’ exploitation and irregular operations.
“While no regulatory system is perfect, the Bank has confidence that the current regulatory framework in Namibia provides a robust framework to regulate banks. Furthermore, should clients be aggrieved or discriminated against, there is recourse available to such clients of commercial banks, including the regulator and relevant law enforcement agencies,” he said.
This comes as current amendments to the High Court and Magistrate legislations which are likely to be tabled by the end of the year in parliament, will certainly restore the dignity of homeowners, who default or fail to meet their mortgage payments, thus risking to lose their houses amid rising interest rates.
The Minister of Justice, Yvonne Dausab who is spearheading the Draft Bill, says the reforms will only cover primary dwellings, while other properties can be liable for repossession as deemed fit by courts or the banks.
Rising interest rates are expected to discourage households from borrowing in the short-to-medium term due to a challenging environment amid the rising cost of living.
Higher interest rates increase the cost of borrowing, reduce disposable income and therefore limit the growth in consumer spending.
