Of  concern to the banks is the millions they are losing out on in fees levied on the transactions every day the policy stays in place.
Of  concern to the banks is the millions they are losing out on in fees levied on the transactions every day the policy stays in place. [Photo/ The East African]

While Equity Bank CEO Dr. James Mwangi took most of the heat after calling on the Central Bank of Kenya  (CBK) to reinstate M-Pesa charges associated with bank-to-mobile money transactions, several other tier-one banks are joining to pile pressure on the regulator.

Absa Bank and KCB Group are among Kenya Bankers Association (KBA) members amplifying the call for the policy to be reviewed.

Mwangi had stated in March that the reinstatement of the charges was important to level the playing field for banks, telcos operating financial services and micro-lenders. The freeze on the charges was put in place in 2020 at the onset of Covid-19 in Kenya to promote cashless payments.

“We have seen the Central Bank has reinstated the charges of microfinance institutions it has reinstated it has reinstated for telecom sector we hope the transaction mobile fees for the bank are also going to be considered for reinstatement so that we can have a level playing field,” he noted on March 10.

The statement riled a section of Kenyans online, many of whom are feeling the pinch of the high cost of living. The fact that practically all of Kenya’s major banks went on to report record-breaking 2021 results only served to further fuel the negative public sentiment towards the move.

READ>>Push to Slash M-Pesa Charges Gathers Steam

Equity Bank Group saw its profit after tax for the 2021 full year soar 99% to Ksh40.1 billion from Ksh20.1 billion the previous year. KCB Bank Group Plc recorded a historic rise in profit after tax which grew 74% to Ksh34.1 billion.

KCB CEO Joshua Oigara on March 16, stated: “Banks have invested a lot and if you look at the transaction throughput, it is up 50 percent to 500 million transactions on our digital channels last year. This requires a lot of investment in terms of throughput, back-end and system processing.”

Echoing Oigara’s statement, Absa Bank CEO Jeremy Awori cautioned that the prolonged stay of the policy would stifle innovation and digital service delivery by Kenya’s financial institutions. In February 2021, Absa disclosed plans to pump Ksh1.6 billion into technology in a bid to enhance customer experience.

Notably, Absa reported a massive 161% increase in profit after tax for the full year ended December 2021 as it grew to Ksh10.86 billion up from Ksh4.16 billion the previous year.

“We saw the volume of transactions shoot up whether it was M-Pesa (or)…bank-to-bank…When you are investing in a mobile platform it is based on a return. The thing that is causing a little worry is that if it stays for long we are going to see innovation and services coming out of the platform reduce,” Awori noted.

Of  concern to the banks is the millions they are losing out on in fees levied on the transactions every day the policy stays in place.

READ>>Is It Safe To Trade Forex In Kenya?

 

 

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