Sitting of tuesday 17th july 2012

(No. B/544)

Mr E. Guimbeau (First Member for Curepipe & Midlands) asked the vice-Prime Minister, Minister of Finance and Economic Development whether, in regard to the commercial banks operating in Mauritius, he will, for the benefit of the House, obtain from the Bank of Mauritius, a list thereof, indicating in each case, the types of loans and other facilities offered to -

(a) individuals, and

(b) corporate bodies, indicating in each case, the

(i) fees;

(ii) charges;

(iii) commissions, and  (iv) interest rates, applicable therefor.

The vice-Prime Minister, Minister of Finance and Economic Development (Mr X. L. Duval): Mr Deputy Speaker, Sir, I am tabling a list of commercial banks authorised by the Bank of Mauritius to operate in Mauritius.

As far as the types of loans and other facilities offered by these banks to individuals and corporate bodies are concerned, the hon. Member  may wish to note that the information is publicly available.  In fact, the Bank of Mauritius has created a special window on its website, namely  http://bom.intnet.mu, to enable members of the public to access such information.  In addition, the public may also access information on fees, charges and rates applied by these banks directly from their websites.

Mr Guimbeau: Mr Deputy Speaker, Sir, I agree with the hon. Minister that they can have it on the website.  But how many people do get access to the website?

M. le président, je voudrais, au nom de la transparence, demander au ministre des Finances s’il peut s’assurer auprès de la Banque de Maurice, que celle-ci impose aux banques commerciales d’afficher le montant et le pourcentage des fees charged, commissions, intérêts de chaque service, tout comme cela se fait pour le taux de change.  It has to be put at the bank and not on the website, where nobody sees it.

Mr Duval: Mr Deputy Speaker, Sir, I don’t know how they are going to affiche it, if not on the website, which is probably the best and easiest method of communication. I don’t know whether the Member is using Internet but still I will pass on the information to Bank of Mauritius, Mr Deputy Speaker, Sir.

Mr Guimbeau: Mr Deputy Speaker, Sir, in view of the indecent profit registered by banks in these most uncertain times, will he, in the interest of bank customers see to it that Bank be directed to bring down fees, charges, commission and all other accessories?

Mr Duval: Mr Deputy Speaker, Sir, as the hon. Member may know, we have 20 banks in Mauritius. So there is a number of Banks. In fact, it is the two major banks that control a major share of the business but, nevertheless, there are 20 banks. Now that brings a competition and also there is a limit to what you can intervene and impose. What the Bank of Mauritius has been doing, not just now but for a long time, people has been complaining on the excess spread between the deposit rate and the loan rates practice by banks in Mauritius. People have been complaining about the excess spread in the exchange rate, differential between the buying and selling rate. These are issues which the Bank of Mauritius recently has brought up and which we support, Mr Deputy Speaker, Sir. However, the Member should know also, that about 50% of the Banks profits are actually made overseas and not in Mauritius. So, in fact, the total amount of profits made by Banks tends to over-declare the profits made in Mauritius.

So, that is also an issue but, Mr Deputy Speaker, Sir, it is in our interest to ensure that the banking customer gets the best possible deal and in that respect Mr Deputy Speaker, Sir, the Bank of Mauritius has made a few announcement recently –

(i) they have asked every banks to have a complaints desk, and

(ii) they have set up a task force to look into the practice of charging fees and other chargers to customers – which I personally feel are probably exaggerated in Mauritius and ought to be brought down.

Mr Deputy Speaker, we are supporting the Bank of Mauritius in that respect and, obviously, by persuasion, the Bank of Mauritius is trying to reduce the spread.

Finally, Mr Deputy Speaker, Sir, I would like to say that with the advent of ten money changes that we have now, we have about six foreign exchange dealers. So, that brings the total number of people practicing foreign exchange in Mauritius to about 36. The good news is that we have seen a reduction in the spread, at least, so far as exchange rates are concerned.

Mr Guimbeau: Yes, Mr Deputy Speaker, Sir, but still Commercial Banks are making billions on the back of all its customers. That is why I am asking to see to it that we can, at least, reduce all the charges, fees and interest rates in the interest of all the people.  And I would like to if you allow me, here, to read Vince Cable, the Secretary of State for business in the UK –

“Banks are ‘throttling’ UK economy recovery. Banks’ anti-business culture and ‘obsession with short-term profits’ is harming the economy”, warns business Secretary, Vince Cable.

“Britain’s banks are ‘throttling’ the economy recovery because of an anti-business culture which focuses on short-term profits (…)”.

This is what he is saying and the same thing applies to us in Mauritius.

Mr Duval: Mr Deputy Speaker, Sir, I hope that the Member is not mixing any problems that he may have with a distressed company that is going down with the situation in the banking sector, because if he is doing that then he must actually declare any conflict of interests, that’s the first thing and that is very important what I am saying.

The second thing, Mr Deputy Speaker, Sir, I have said that we accept that, but it has been going on since independence, that we can do better in the banking sector and we want to do better.  Recently, the Bank of  Mauritius has issued a number of statements to try to get a complaints desk, to try and reduce spread, etc. and this is being done and has had some effect, as I mentioned, in exchange rate. So, blanket statements like that do not make any sense or serve any useful purpose.

Mr Guimbeau: Yes I just want to say that it is not a blanket statement.