By BUUMBA CHIMBULUTHE overall earnings performance of commercial banks was not adversely affected by the removal of unwarranted bank charges, according to a study conducted by the Financial Sector Deepening (FSD) Zambia.In September 2018, the Bank of Zambia issued a directive prohibiting certain commercial bank service charges and fees, which it deemed as unwarranted.The report rather indicated that banks were compelled to become innovative in the way they raised revenue, particularly shifting to intermediation earnings, given that there was little to be done to minimise noninterest expenses.According to the report, commercial banks did not suffer a long-term loss in noninterest income from the removal of unwarranted bank charges.It however states that disaggregated by size, the analysis revealed that the upward trend in noninterest income could primarily be attributed to large banks while noninterest income for small banks appears to remain relatively flat.“The study finds mixed results on the effect of the removal of unwarranted bank […]
BANKS ON SOUND FOOTING- REPORT, EVEN AFTER REMOVAL OF CHARGES
