The banking industry in Ghana today is becoming competitively keener and keener. It is interesting to see the staff of banks move from office to office soliciting for accounts to be opened with their respective banks. The Ghanaian banks are now prepared to give information about their services and products to potential clients than previously. It is refreshing to have many of these banks opening up new branches and improving upon their customer services. The heralding of some foreign banks has actually taught the old Ghanaian banks great lessons. Banks that closed down the accounts of their clients because they couldn’t meet the minimum balances are now chasing these same people to have accounts opened with zero balances. What a funny world?
It is civilizing that, Banks in Ghana now value their clients but there is more to be done. Some of the Banks still have a big problem taking adequate care of their clients. They would go heaven and earth to get an account opened, and after this, they abandon those clients somehow forever. Some banks really know that customer care is an everlasting service as far as the bank continues to exist.
Many banks in Ghana have really taken their clients for granted for far too long. There are still unnecessary long queues in some banks; some banks still make deductions without explaining to their customers the meaning of these deductions. Banks in Ghana still increase charges without detailing or informing their clients or customers.
Almost all banks in Ghana complain that there are so many Ghanaians, who do not use the banks or do not have bank accounts, but they normally do not take into consideration the kind of treatment and care that they mete out to the already existing clientele that they have. Ghanaians do not have time for long queues; they need to use their time judiciously for other things that could earn them some money.
Therefore, there is no other time left to be wasted in queues at banking halls. There have been artificial queues in many branches of Barclays bank, especially in Accra here. Ghanaians do not care about the number of customers a bank has. What, they care about is the service a bank provides them with. I know that some banks like Guaranty Trust Bank, Fidelity Bank are doing well in this direction; they do not have queues. It’s not about customer base, it’s about priority.
Ghana Commercial Bank (GCB) does one particular thing that beats my mind, my elder brother has an account with GCB in Bawku, any time I deposit money into that account and he goes to take it, some “commission” or some illegal deductions are made on the money. This does not happen with other banks. Once a bank is networked, then I believe we are dealing with the bank but not the branch, so why this wrongful deductions, GCB? It’s not a transfer, is it?
Many Ghanaians would wish to have bank accounts, especially savings accounts, (though it’s not good to save when the inflation rates are high) but the banks in Ghana would give very little interest rates that do not attract many people to save with them. Ghanaians know that if they use the money somewhere else, they would get more than they would get from savings accounts. It is true that some banks have high interest rates for fixed deposits, etc, but these rates are not made known by the banks to the public and these rates also require some minimum amounts, instead of any amount. Where, it is known, one has to negotiate for a good rate. Negotiating for a rate, for me is discriminatory, because, two people with the same amount for fixed deposits could get different rates. Is this not discriminatory? I believe that services to clients should be the same for the same category of clients.
International motivational speaker and writer, Anthony Robbins wrote in his book ‘Awaken the Giant Within’ ‘it all began with savings and loan challenges that came up in the late seventies and early eighties. Banking and S&I institutions had built their business primarily on the corporate and consumer market. For a bank to profit, it has to make loans, and those loans have to be at an interest rate that’s above what it pays out to depositors. In the first stages of the problem, the banks faced difficulties several fronts. First, they were hit hard when corporations entered what had previously been the sole domain of banks: lending. Large companies found that by lending to one another, they saved significantly on interest, developing what’s now known as the “commercial paper market.” This was so successful that it virtually destroyed the profit centers of many banks.
Meanwhile, there were new developments on the American consumer front as well.
Traditionally, consumers did not look forward to meeting with a loan officer at a bank, meekly asking for loans to purchase a car or large appliance. I think we can fairly say that this was a painful experience for most as they subjected themselves to financial scrutiny. They didn’t usually feel like a “valued customer” at many banks. Car companies were smart enough to recognize this and began offering loans to their customers, creating a new source of profit for themselves. They saw that they could make as much money on the financing as they did on the car they sold, and they could give the customer a great deal of convenience and lower interest rates. Their attitude was, of course, quite different from the bankers’ – they had a vested interest in seeing the customer get his loan. Soon, the customers came to prefer the in-house financing over the traditional method, appreciating the convenience, flexibility, and low financing fees. Everything was handled in one place by a courteous person who wanted their business. Consequently, General Motors Acceptance Corporation (GMAC) quickly became one of the largest car-financing companies in the country.
One of the last bastions for bank loans was the real estate market, but interest rates and inflation had soared in one year as high as 18 percent. As a result, no one could afford the monthly payments that servicing loans at this interest rate required. As you can imagine, real estate loans dropped off the map.
By this time, the banks had lost their corporate customers en masse, they had lost the market for a great deal of their car loans, and they had begun to lose the home loans as well. The final slap to the banks was that the depositors, in response to inflation, needed a higher rate of return while the banks were still carrying loans that would yield significantly lower interest rates. Every day, the banks were losing money; they saw their survival at stake and decided to do two things. First, they lowered their standards for qualifying customers for loans. Why? Because they believed that if they didn’t lower their standards, there would be no one to loan money to. And if they didn’t loan money, they couldn’t profit, and they’d clearly have pain. If, however, they were able to loan money to someone who paid them back, they’d have pleasure. Plus, there was very little risk. If they loaned money and the lendee didn’t meet the obligation, then the taxpayers, namely you and I, would bail them out anyway. So in the final analysis, there was very little fear of pain and tremendous incentive to “risk” their (our?) capital.
These banks and S&Ls also pressured Congress to help keep them from going under, and foreign series of changes occurred. Large banks realized that they could loan money to foreign nations that were desperately hungry for capital. The lenders realized that over breakfast they could commit more than $ 50 million to a country. They didn’t have to work with millions of consumers to lend the same amount, and the profits on these larger loans were sizable. The bank managers and loan officers were also often given bonuses in relation to the size and number of loans they could produce. The banks were no longer focusing on the quality of a loan. Their focus was not on whether a country like Brazil could pay the loan back or not, and frankly, many weren’t terribly concerned. Why? They did exactly what we taught them: we encourage them to be gamblers with the Feral Deposit Insurance, promising that if they won, they won big, and if they failed, we would pick up the tab. There was simply too little pain in this scenario for the banker’.
Banks in Ghana could do more than they are offering now and if not a time will come that the scenario above will be the story here too. Banks in Ghana should reach out to society generously. They should not just seek to maximize profits for shareholders and forgetting the interests of all other stakeholders, who also have their own different needs.
The Banks have created an environment for themselves in which the ordinary Ghanaian sees them as a place for only affluent people. Many ordinary Ghanaians think that the Banks are meant for the rich in society.
The life styles of some bankers might have generated this perception. An ordinary worker in a bank in Ghana lives a better life than a University professor if I am not mistaking. The ordinary Ghanaian would ask ‘why, should I give my money to the bankers to enrich themselves?’ There is a perception out here that all bankers are rich. If it is true that all bankers are rich, then, it means the banks uses the account holders’ money to get more money and use that to pay their workers heavily or grant them fat loans without interest or with very low interests.
The account holders, who really deserve to get the lion’s share of the profits that these banks make, are denied of them.
Many ordinary Ghanaians, would say, ‘I would not put my money in a bank for the bank to use it to enrich its staff and if I need a small loan they would not give it to me and when it is given to me, it is with very high interest.’ The cut-throat interests charge on loans granted to customers need a second look. Even if Bank of Ghana reduces its policy rate many Ghanaian banks don’t reduce theirs, when they are asked, they come out inexcusable explanations. Do they really care about their clients and for business and national growth?
Banks in Ghana need to:
• Offer free financial advice to clients, by organizing seminars, etc and visiting offices to offer free lectures.
• Put up structures and facilities in parts of the country with their inscriptions on them. I mean notable, indelible corporate social responsibility. They should use some of their profits to build hospitals, clinics; construct bore-holes, etc for society. Society would in turn recognize their good deeds and open and maintain bank accounts with them, they therefore continue to exist profitably.
• Give discounts (trade or cash discounts) to borrowers to encourage them to pay promptly and with ease and convenience. (Manufacturing companies, do this, why not the banks do it too. Don’t they have their money to operate by now?)
• Eliminate queues
• Reduce interest rates charged on loan to customers. The interest rates are incredible. The bank of Ghana policy rate has always been a determinant, but what the commercial banks add has been frightening.
• Have easy ways of depositing and withdrawing cash for those customers who cannot read and write.
• Increase interest rates on savings accounts.
• Always explain deductions made on accounts. (I know a number of people, who have shown me their bank statements, asking for the meaning of deductions made by their banks.)
• Embark on more education to instill the culture and habit of saving in the youth especially.
• The banks should have preferential treatment for the under listed; in terms of interest rates and charges, care and should even service them at their offices and or residences.
• Medical Doctors and other health workers
• Professional accountants, ACCA, ICA, CIMA, CPA, FA etc.
• Professional footballers
• Miners
• Exporters and Importers
• Bishops and pastors
• National best farmers
• Lawyers (The Bar)
• Judges
• Retired chief justices
• Members of the National House of Chiefs and Regional House of Chiefs
• Lectures / Teachers
• Other professional organized groups.
Ghanaians would love to use the banking system efficiently but the banks do not get endeared to the public and do not make themselves easily accessible.
© 2010, Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
Blog: www. G-xavierayeebo.blogspot.com
It is civilizing that, Banks in Ghana now value their clients but there is more to be done. Some of the Banks still have a big problem taking adequate care of their clients. They would go heaven and earth to get an account opened, and after this, they abandon those clients somehow forever. Some banks really know that customer care is an everlasting service as far as the bank continues to exist.
Many banks in Ghana have really taken their clients for granted for far too long. There are still unnecessary long queues in some banks; some banks still make deductions without explaining to their customers the meaning of these deductions. Banks in Ghana still increase charges without detailing or informing their clients or customers.
Almost all banks in Ghana complain that there are so many Ghanaians, who do not use the banks or do not have bank accounts, but they normally do not take into consideration the kind of treatment and care that they mete out to the already existing clientele that they have. Ghanaians do not have time for long queues; they need to use their time judiciously for other things that could earn them some money.
Therefore, there is no other time left to be wasted in queues at banking halls. There have been artificial queues in many branches of Barclays bank, especially in Accra here. Ghanaians do not care about the number of customers a bank has. What, they care about is the service a bank provides them with. I know that some banks like Guaranty Trust Bank, Fidelity Bank are doing well in this direction; they do not have queues. It’s not about customer base, it’s about priority.
Ghana Commercial Bank (GCB) does one particular thing that beats my mind, my elder brother has an account with GCB in Bawku, any time I deposit money into that account and he goes to take it, some “commission” or some illegal deductions are made on the money. This does not happen with other banks. Once a bank is networked, then I believe we are dealing with the bank but not the branch, so why this wrongful deductions, GCB? It’s not a transfer, is it?
Many Ghanaians would wish to have bank accounts, especially savings accounts, (though it’s not good to save when the inflation rates are high) but the banks in Ghana would give very little interest rates that do not attract many people to save with them. Ghanaians know that if they use the money somewhere else, they would get more than they would get from savings accounts. It is true that some banks have high interest rates for fixed deposits, etc, but these rates are not made known by the banks to the public and these rates also require some minimum amounts, instead of any amount. Where, it is known, one has to negotiate for a good rate. Negotiating for a rate, for me is discriminatory, because, two people with the same amount for fixed deposits could get different rates. Is this not discriminatory? I believe that services to clients should be the same for the same category of clients.
International motivational speaker and writer, Anthony Robbins wrote in his book ‘Awaken the Giant Within’ ‘it all began with savings and loan challenges that came up in the late seventies and early eighties. Banking and S&I institutions had built their business primarily on the corporate and consumer market. For a bank to profit, it has to make loans, and those loans have to be at an interest rate that’s above what it pays out to depositors. In the first stages of the problem, the banks faced difficulties several fronts. First, they were hit hard when corporations entered what had previously been the sole domain of banks: lending. Large companies found that by lending to one another, they saved significantly on interest, developing what’s now known as the “commercial paper market.” This was so successful that it virtually destroyed the profit centers of many banks.
Meanwhile, there were new developments on the American consumer front as well.
Traditionally, consumers did not look forward to meeting with a loan officer at a bank, meekly asking for loans to purchase a car or large appliance. I think we can fairly say that this was a painful experience for most as they subjected themselves to financial scrutiny. They didn’t usually feel like a “valued customer” at many banks. Car companies were smart enough to recognize this and began offering loans to their customers, creating a new source of profit for themselves. They saw that they could make as much money on the financing as they did on the car they sold, and they could give the customer a great deal of convenience and lower interest rates. Their attitude was, of course, quite different from the bankers’ – they had a vested interest in seeing the customer get his loan. Soon, the customers came to prefer the in-house financing over the traditional method, appreciating the convenience, flexibility, and low financing fees. Everything was handled in one place by a courteous person who wanted their business. Consequently, General Motors Acceptance Corporation (GMAC) quickly became one of the largest car-financing companies in the country.
One of the last bastions for bank loans was the real estate market, but interest rates and inflation had soared in one year as high as 18 percent. As a result, no one could afford the monthly payments that servicing loans at this interest rate required. As you can imagine, real estate loans dropped off the map.
By this time, the banks had lost their corporate customers en masse, they had lost the market for a great deal of their car loans, and they had begun to lose the home loans as well. The final slap to the banks was that the depositors, in response to inflation, needed a higher rate of return while the banks were still carrying loans that would yield significantly lower interest rates. Every day, the banks were losing money; they saw their survival at stake and decided to do two things. First, they lowered their standards for qualifying customers for loans. Why? Because they believed that if they didn’t lower their standards, there would be no one to loan money to. And if they didn’t loan money, they couldn’t profit, and they’d clearly have pain. If, however, they were able to loan money to someone who paid them back, they’d have pleasure. Plus, there was very little risk. If they loaned money and the lendee didn’t meet the obligation, then the taxpayers, namely you and I, would bail them out anyway. So in the final analysis, there was very little fear of pain and tremendous incentive to “risk” their (our?) capital.
These banks and S&Ls also pressured Congress to help keep them from going under, and foreign series of changes occurred. Large banks realized that they could loan money to foreign nations that were desperately hungry for capital. The lenders realized that over breakfast they could commit more than $ 50 million to a country. They didn’t have to work with millions of consumers to lend the same amount, and the profits on these larger loans were sizable. The bank managers and loan officers were also often given bonuses in relation to the size and number of loans they could produce. The banks were no longer focusing on the quality of a loan. Their focus was not on whether a country like Brazil could pay the loan back or not, and frankly, many weren’t terribly concerned. Why? They did exactly what we taught them: we encourage them to be gamblers with the Feral Deposit Insurance, promising that if they won, they won big, and if they failed, we would pick up the tab. There was simply too little pain in this scenario for the banker’.
Banks in Ghana could do more than they are offering now and if not a time will come that the scenario above will be the story here too. Banks in Ghana should reach out to society generously. They should not just seek to maximize profits for shareholders and forgetting the interests of all other stakeholders, who also have their own different needs.
The Banks have created an environment for themselves in which the ordinary Ghanaian sees them as a place for only affluent people. Many ordinary Ghanaians think that the Banks are meant for the rich in society.
The life styles of some bankers might have generated this perception. An ordinary worker in a bank in Ghana lives a better life than a University professor if I am not mistaking. The ordinary Ghanaian would ask ‘why, should I give my money to the bankers to enrich themselves?’ There is a perception out here that all bankers are rich. If it is true that all bankers are rich, then, it means the banks uses the account holders’ money to get more money and use that to pay their workers heavily or grant them fat loans without interest or with very low interests.
The account holders, who really deserve to get the lion’s share of the profits that these banks make, are denied of them.
Many ordinary Ghanaians, would say, ‘I would not put my money in a bank for the bank to use it to enrich its staff and if I need a small loan they would not give it to me and when it is given to me, it is with very high interest.’ The cut-throat interests charge on loans granted to customers need a second look. Even if Bank of Ghana reduces its policy rate many Ghanaian banks don’t reduce theirs, when they are asked, they come out inexcusable explanations. Do they really care about their clients and for business and national growth?
Banks in Ghana need to:
• Offer free financial advice to clients, by organizing seminars, etc and visiting offices to offer free lectures.
• Put up structures and facilities in parts of the country with their inscriptions on them. I mean notable, indelible corporate social responsibility. They should use some of their profits to build hospitals, clinics; construct bore-holes, etc for society. Society would in turn recognize their good deeds and open and maintain bank accounts with them, they therefore continue to exist profitably.
• Give discounts (trade or cash discounts) to borrowers to encourage them to pay promptly and with ease and convenience. (Manufacturing companies, do this, why not the banks do it too. Don’t they have their money to operate by now?)
• Eliminate queues
• Reduce interest rates charged on loan to customers. The interest rates are incredible. The bank of Ghana policy rate has always been a determinant, but what the commercial banks add has been frightening.
• Have easy ways of depositing and withdrawing cash for those customers who cannot read and write.
• Increase interest rates on savings accounts.
• Always explain deductions made on accounts. (I know a number of people, who have shown me their bank statements, asking for the meaning of deductions made by their banks.)
• Embark on more education to instill the culture and habit of saving in the youth especially.
• The banks should have preferential treatment for the under listed; in terms of interest rates and charges, care and should even service them at their offices and or residences.
• Medical Doctors and other health workers
• Professional accountants, ACCA, ICA, CIMA, CPA, FA etc.
• Professional footballers
• Miners
• Exporters and Importers
• Bishops and pastors
• National best farmers
• Lawyers (The Bar)
• Judges
• Retired chief justices
• Members of the National House of Chiefs and Regional House of Chiefs
• Lectures / Teachers
• Other professional organized groups.
Ghanaians would love to use the banking system efficiently but the banks do not get endeared to the public and do not make themselves easily accessible.
© 2010, Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
Blog: www. G-xavierayeebo.blogspot.com
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