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Era of Free Banking?
Rank: New-farer Joined: 2/19/2011 Posts: 14 Location: Nairobi
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Could this be the advent of free banking in Kenya? Interesting though if BBK pulls it off. BBK Free Banking
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Rank: Member Joined: 6/21/2010 Posts: 514 Location: Nairobi
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One way or the other the consumer will pay. Their's nothing for free! 'They say money cannot buy me happiness but when i compare when i had none and now, i'm happier' Kevin O'leary
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Free banking... That is an oxymoron  The term banking & free cannot exist to form a term or word $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: New-farer Joined: 2/19/2011 Posts: 14 Location: Nairobi
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hisah wrote:Free banking... That is an oxymoron The term banking & free cannot exist to form a term or word But Banking in the UK is absolutely free for individuals/Personal accounts whether savings or current. What is that?
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Rank: Veteran Joined: 11/9/2009 Posts: 2,003
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I watching this development with bated breath, l want to see how the other banks react. I hope this will be a replica of whats happening in the mobile services industry.
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Rank: Elder Joined: 5/27/2008 Posts: 3,760
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They have already crunched their numbers. I'm not a customer, but what is the least ledger fee? Lets say it is ksh 300. How many ATM withdrawals does a normal Kenyan do in a month? Say it is three. Means from every account holder they will make ksh 300 - ( 3 X ksh 30) = ksh 210. Where is the free lunch?
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Rank: Elder Joined: 12/11/2008 Posts: 2,306
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I saw the BBK ad and was like, WTH!!! These guys charge you for even checking your balance, breathing the air in their banking halls Etc. I am so glad I am not their customer. I now see where the 13b profit came from. Nktest Great men are not always wise, neither do the aged understand judgement...
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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The ATM has finally matured into into a Kano Threshold service: Started out as an exciter and customers weren't charged for it... in fact SCBK was paying customers to use the ATM at one time! Then it became a Performance Service and banks were competing on who has a bigger network... and charging for usage. Now it has become a Threshold and no institution can be called a "bank" if it doesn't have the service. Therefore, it will become more and more difficult to charge for ATM services.... just wait and see.... Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: New-farer Joined: 9/17/2010 Posts: 97 Location: Mombasa,Kenya
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Crap barclays..i hear they charge 40bob for deposits?? amazing...nothings free, especially with BBK
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Rank: Veteran Joined: 12/9/2010 Posts: 894 Location: Nairobi
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i am waiting to see what competitors will do. and me think that nothing is for free. Don't wait for the Last Judgment. It happens every day. ~Albert Camus, The Fall, 1956
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Rank: Member Joined: 8/5/2009 Posts: 597
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Me think the banking industry is rigid and due to the fact that Kenyan mkt is sort of segmented with each bank having a core mkt target, what we have seen in the telecom industry might not be replicated in the banking industry. En yes there is nothing for free  , somehow the customers are going to pay for the services. The problem with the world is that the intelligent people are full of doubts while the stupid ones are full of confidence
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Rank: New-farer Joined: 2/19/2011 Posts: 14 Location: Nairobi
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captainrio wrote:Crap barclays..i hear they charge 40bob for deposits?? amazing...nothings free, especially with BBK To be fair to them, not all accounts have a ledger fee and only 1 charges for deposits. I think this development will send competitors thinking very hard, especially those that rely on transaction fees as their main threshhold.
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Rank: Veteran Joined: 11/2/2006 Posts: 1,206 Location: Nairobi
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I think all other BIG banks will have to follow suit.A friend was telling me that in most Canadian banks ATM withdrawals are free...in any case,they are giving out loans & earning interest income using your money.... I see a problem here for Equity Bank.....Lets imagine that a kawa customer uses the ATM 3times a month and they have 5.9Million customers (http://www.equitybank.co.ke/about.php?subcat=5). That's 5.9Million*3*25sh=442,500,000 per month ie 5,310,000,000 per year. Of course the above calculations are not factual but I guess that's where Equity makes more money from compared to other banks.It will definitely be a hard hitter. Formally employed people often live their employers' dream & forget about their own.
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Rank: Elder Joined: 6/2/2008 Posts: 1,438
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bird_man wrote:I think all other BIG banks will have to follow suit.A friend was telling me that in most Canadian banks ATM withdrawals are free...in any case,they are giving out loans & earning interest income using your money....
I see a problem here for Equity Bank.....Lets imagine that a kawa customer uses the ATM 3times a month and they have 5.9Million customers (http://www.equitybank.co.ke/about.php?subcat=5).
That's 5.9Million*3*25sh=442,500,000 per month ie 5,310,000,000 per year.
Of course the above calculations are not factual but I guess that's where Equity makes more money from compared to other banks.It will definitely be a hard hitter.
We have to see what is in the fine print for the BBK offer. I have a number of accounts domiciled in Equity which attract absolutely no charges unless I use their services. Would I move them to BBK because of free ATM services? Only if there are no ledger fees, NO minimum balances thresholds etc. I also bank with a couple of other banks who have no ledger fees but I have to maintain a certain MINIMUM balance. There is a cost to these services one way or the other.
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Rank: Veteran Joined: 11/2/2006 Posts: 1,206 Location: Nairobi
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@Mwanahisa....perhaps for new account holders and especially the ones who use such accounts for salary/spending purposes.Anyway....lets see what happens in the long run. Formally employed people often live their employers' dream & forget about their own.
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Rank: Elder Joined: 12/9/2009 Posts: 6,592 Location: Nairobi
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ChumviMacho wrote:Could this be the advent of free banking in Kenya? Interesting though if BBK pulls it off. BBK Free Banking I think you misunderstood something. It's only free of ATM charges if and only when you use their ATMs.
BBI will solve it :)
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Rank: Member Joined: 7/20/2006 Posts: 277
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ATM's are a major revenue stream to anyone and i understand its ROI is within six months! This is a puzzle for bbk to do that.
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Rank: Member Joined: 6/11/2008 Posts: 257
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mwanahisa wrote:bird_man wrote:I think all other BIG banks will have to follow suit.A friend was telling me that in most Canadian banks ATM withdrawals are free...in any case,they are giving out loans & earning interest income using your money....
I see a problem here for Equity Bank.....Lets imagine that a kawa customer uses the ATM 3times a month and they have 5.9Million customers (http://www.equitybank.co.ke/about.php?subcat=5).
That's 5.9Million*3*25sh=442,500,000 per month ie 5,310,000,000 per year.
Of course the above calculations are not factual but I guess that's where Equity makes more money from compared to other banks.It will definitely be a hard hitter.
We have to see what is in the fine print for the BBK offer. I have a number of accounts domiciled in Equity which attract absolutely no charges unless I use their services. Would I move them to BBK because of free ATM services? Only if there are no ledger fees, NO minimum balances thresholds etc. I also bank with a couple of other banks who have no ledger fees but I have to maintain a certain MINIMUM balance. There is a cost to these services one way or the other. Bank of Baroda no ledger fee, Yes but minimum balance is there. I want to be a millionaire.
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Rank: Member Joined: 7/4/2010 Posts: 118
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Eddy wrote:ATM's are a major revenue stream to anyone and i understand its ROI is within six months! This is a puzzle for bbk to do that. Eh...clearly you have never left the planet called Kenya! A puzzle? Bwana, in other countries, just about ALL atms dispense cash when you use ANY visa card with absolutely no charges (ofcourse with few and far between exceptions) as a norm!
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Rank: Member Joined: 8/25/2008 Posts: 144
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The truth of the matter is, bank charges are coming down, and especially when it becomes a competing factor, just like air times.
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