The Zambia Union of Financial and Allied Workers of Zambia (ZUFIAW) has supported the directive by the Bank of Zambia to prohibit commercial banks from charging customers unwarranted fees.

Government, through the Bank of Zambia, has with immediate effect scrapped off unwarranted charges and fees by banks as this will now be illegal.

The Bank of Zambia has since directed all banks in the country to stop such charges.

The Directive is in the Government Gazette number 6693 made available to the media.

In a circular signed by BoZ Deputy Governor in Charge of Operations Dr. Bwalya Ng’andu, it reads in part “pursuant to directive Number 9, the Bank of Zambia hereby designates September 4th, 2018 as the effective date on which the said directive will come into effect.

But ZUFIAW Secretary General Chingati Msiska says the union has been alarmed by the introduction of many unreasonable charges which he believes are inimical to the socio-economic prosperity of the citizenry owing to lose of income to commercial banks.

Mr. Msiska says these charges have been an affront to the spirit of financial inclusion as people tends to be hesitant to keep their money in commercial banks because of the charges on transactions.

“There are just too many charges on transactions. For example, it is illogical for a customer to be charged K50 for making an over-the-counter cash withdraw. Even at automated teller machines, you would find that every transaction costs K10. If a customer makes three transactions, they pay K30. This could be a reason why some people choose to keep their money at home”, says Mr. Msiska.

He says whilst he notes that the scrapping of these charges and fees could result in financial loss, the union however believes that the move will encourage financial institutions to be more robust in extending finance to the private sector.

The ZUFIAW SG has however categorically stated that the union will not expect any loss of employment and ZUFIAW will therefore not entertain any institution that may use the action by the Central Bank as an excuse to throw workers out of work.

“We would like to be very emphatic that the union is following very closely the behaviour of financial institutions. We will be very uncompromising on any institution that may make maneuvers towards downsizing. Instead, we would like to encourage them to focus their attention on their core mandate which is mobilizing savings, providing loans, and offering investment products to the market. This is what keeps financial institutions profitable and not bank charges”, says Mr. Msiska.

He has since encouraged the Central Bank, as a regulator to ensure that commercial banks implement this directive in totality.