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Banks now halt mobile money transfer charges

StanChart
StanChart is one of the banks that have waived the costs. FILE PHOTO | NMG 

Banks on Wednesday made a U-turn on ignoring the Central Bank of Kenya’s (CBK) directive to remove transaction costs for customers who move money between their mobile wallets and bank accounts.

Standard Chartered #ticker:SCBK, Co-operative Bank #ticker:COOP and Stanbic #ticker:CFC eliminated the fees after defying the CBK directive to eliminate the charges from Monday night.

The CBK agreed with the banks to waive the charges starting Monday night until June 30 in the push for cashless payments aimed at curbing the spread of the coronavirus.

But some like Equity Bank #ticker:EQTY said they need to have their board approve the removal of the charges.

On Wednesday, CBK governor Patrick Njoroge said banks ought to have eliminated the fees after President Uhuru Kenyatta’s briefing on Sunday.

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“Banks will ensure that these transfers between mobile wallets and the bank accounts will be costless, meaning there are no charges. This should have happened two days ago,” Dr Njoroge said.

On Tuesday, StanChart charged a customer at 11.49am Sh40 for transferring Sh1,000 from the account to their mobile wallet.

Stanbic Bank was yet to remove Sh84 charge for moving Sh2,000 to an M-Pesa account.

Coop Bank capped free transfers at Sh1,000 with a transfer of Sh1,500 facilitated by the Business Daily, attracting a fee of Sh38. The three banks Wednesday eliminated the charges.

Dr Njoroge added that all lenders will further be required to waive transaction costs for customers checking their bank balances as the State scales efforts to spur cashless transactions and curb transmission of the deadly virus.

“Today and now many banks charge a particular fee for just checking my balance on the phone, that would be eliminated,” the governor added.

Lenders make millions of shillings from charging customers to check their bank balances on phones, which currently stands at a minimum of Sh12 per transaction.

Banks in Kenya also generate billions of shillings from transactions, which becomes a prominent income stream in the environment where lending rates were capped.

The legal caps on lending rates were removed in November last year.

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