FNB clears air on cross-border pricing
FIRST National Bank (FNB) Lesotho says the service charge on its cross border cash deposit service is meant to provide convenience to Basotho who would otherwise be forced to commit time and financial resources to deposit money in South Africa.
The service came under scrutiny when a customer, Khasane Ramolefe, questioned the purpose of the service charge, alleging it was unfair to the bank’s customers and competitors.
Mr Ramolefe had alleged that the service which comes with a separate charge on top of the deposited amount was only applied by FNB Lesotho.
He further said he suspected the service was not applied in the southern Africa region where the larger FirstRand Group of which FNB Lesotho is a subsidiary, also operates.
He argued FNB Lesotho was taking advantage of the fact that there was no law that deals particularly with service charges in Lesotho. Mr Ramolefe’s complaint had even reached the Central Bank of Lesotho in its capacity as supervisor of financial institutions.
However, addressing a media briefing yesterday, FNB Lesotho Deputy Chief Executive Officer Mokhachane Mopeli said the service provided convenience to Basotho, saving them the time and financial resources required to deposit money in South Africa.
He said the bank charges a service fee of one percent for every deposited amount which is reflected instantly in South Africa.
The service, which Mr Mopeli said could carry a different charge, was also available in other FNB banks in the region.
He said they had designed the fee to be charged separately from the deposited amount in order to avoid reducing the deposited amount. However, upon withdrawal on the other side, a withdrawal charge is levied on the deposited amount.
“We believe this is a more convenient way of charging the service fee because it does not reduce the value of the amount being deposited,” Mr Mopeli said.
He added that clients depositing amounts larger than M5 000 were encouraged to use other channels such as electronic banking, as these were more cost effective and convenient. There were also many benefits to the immediate transfer and access of cash across borders.
“For example, FNB Lesotho’s cross border facility recently saved a life, where a hospital in South Africa would not attempt to operate on a Mosotho patient who urgently needed surgery,” Mr Mopeli said.
“The hospital and medical staff insisted that a certain amount of the medical bill be paid upfront for such an operation to be administered.
“For immediate cash reflection in the hospital’s account, the patient’s family had to deposit, through FNB Lesotho, into the hospital’s account. As soon as the deposit was done, the transaction reflected and the patient was taken into theatre and survived.
“The difference of one percent of the amount they deposited went a much longer way versus the couple of days it would have taken for a transfer through their bank,” he said.
He also said most parents in Lesotho found it effective and convenient to pay for examination fees through FNB Lesotho in order to meet deadlines at their children’s schools in SA.
“We strongly believe that the cross border deposit facilities are the right products for our clients and their charge is a true value-add. In addition, we also offer electronic transfers at highly competitive rates. For instance an electronic transfer to SA would cost only M11.50,” he added.