Africa-Press – Namibia. THE Namibian Competition Commission on 10 March 2022 resolved to initiate two investigations against First National Bank (Namibia) (“FNB”) and Others in terms of Section 33 of the Namibian Competition Act, 2003 (No. 2 of 2003).
The first investigation relates to the alleged historic fixing of interchange rates through the Payments Association of Namibia (PAN) by commercial banks.
An interchange fee refers to the charges payable in respect of credit/debit card transactions whereby a payment is made by a customer of one bank to a customer of another bank.
This investigation includes PAN, and all registered commercial banks comprising FNB; Banco ATLANTICO Europa – Namibian Branch; Bank BIC Namibia; Bank Windhoek; Letshego Bank Namibia; Nampost Savings Bank; Nedbank Namibia; Standard Bank Namibia; and Trustco Bank Namibia.
The second investigation is against the Bankers Association of Namibia, FNB, Bank Windhoek, Standard Bank and Nedbank for possible discriminatory conduct (applying dissimilar conditions to equivalent transactions) in the provision of fire insurance (“cover”) for home loans, unfair pricing of certain ancillary services, as well as discrimination (dissimilar conditions to equivalent transactions) in the provision of home loans to clients belonging to other banks vis-a-vis their own clients.
Furthermore, it is alleged that FNB, Bank Windhoek, Standard Bank and Nedbank hold a dominant position in the relevant market. The alleged conduct by FNB, Bank Windhoek, Standard Bank and Nedbank amounts to a possible contravention of Section 23(1) read together with several other sections of the competition commission act.
Paulus Hangula, acting director and senior economist at the Competition Commission shared that in April 2018, the Commission issued an advisory opinion to PAN (upon its request) regarding the collaboration by commercial banks on the interchange fees.
The Commission concluded that such collaboration gives rise to potential price-fixing as envisaged in Section 23(3) of the Namibian Competition Act and advised PAN to apply for exemption in terms of Section 27(1) of the Act. This PAN undertook in August 2019, for consideration by the Commission. In its application, PAN accepted that the interchange model, adopted by its members, fixes interchange fees agreed between Namibian banks through its Payment Clearing House Card Schedule.
“This conduct has been ongoing for a number of years until the time when the exemption application was granted with conditions in October 2020. Such practice by the commercial banks amounts to a possible contravention of Section 23(1) read together with Section 23(2)(a) and Section 23(3)(a). To that effect, the Commission resolved to initiate an investigation into the alleged historical conduct in the relevant market,” Hangula stated.
He added that the second investigation emanates from allegations that FNB, Bank Windhoek, Standard Bank and Nedbank charge home loan clients an additional rate on top of interest rates determined as per the client’s financial profile if such client has his or her main transactional day-to-day account with a competing banking institution.
Hangula further shared that it is also alleged that FNB, Bank Windhoek, Standard Bank and Nedbank charge unreasonably high and unfair prices for the provision of ancillary services being the issuing of a home loan pre-approval letter and bank confirmation letters.
It is further alleged that FNB, Bank Windhoek, Standard Bank and Nedbank apply dissimilar conditions to equivalent transactions in the provision of fire cover to home loan clients.
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