South African banking charges were higher than they would be at competitive levels, according to a Competition Commission enquiry report released on Wednesday.
”The market structure, because of current information asymmetries and product complexities, means that the banks have the ability to abuse their market power,” the commission said in a statement.
The investigation found a ”complex and sophisticated banking system involving the big four banks” which control over 90% of the retail market.
The commission’s Banking Enquiry Panel was established in August 2006 to investigate the level and structure of bank charges, and access to the retail banking sector.
Retail banking in South Africa is dominated by Standard Bank, FirstRand unit First National Bank, Barclays subsidiary Absa and Nedbank.
The panel said it made 28 recommendations aimed at addressing concerns raised by consumers and smaller banks during three weeks of public hearings.
The recommendations concern penalty fees, ATM charges and products and pricing.
”The banking sector is ripe for innovation on the back of new business processes and technologies. Already we are seeing responses consistent with the direction of this report, which can fuel this dynamism,” the commission statement said. – Reuters