The published information benefits both individual and business consumers targeting to orient them toward appropriate and favourable solutions and have an impact also on increasing market competition on the interest rates and commissions offered for banking products and services
TIRANA, July 30 – Albania’s central bank has finally made transparent information on interest rates and commissions the 16 commercial banks operating in the country offer to both household and business customers. The information made available on the Bank of Albania official website provides detailed data on commissions charged for banking products and services and interest rates on both deposits and loans in the national currency, lek, and the main three foreign currencies, Euro, US dollar and GBP.
The project, aimed at increasing customer transparency and promoting competition among the commercial banks which are overwhelmingly foreign-owned, comes after the central bank made some changes to the transparency regulation back in 2011.
“The published information benefits both individual and business consumers targeting to orient them toward appropriate and favourable solutions in accordance with their financial situation. On the other hand, the project is expected to have an impact also on increasing market competition on the interest rates and commissions offered for banking products and services,” says the central bank.
The Bank of Albania will report on commissions and interest rates on products and services offered by banks every three months in a comparative method.
The Competition Authority, which has earlier denounced high fees applied by banks, has hailed the Bank of Albania measures for the online publication of information.
“Such an initiative will increase market transparency and lower information asymmetry between banking services customers and banks.”
Back in early 2011, the Competition Authority found after monitoring the market for more than one year that commercial banks operating in Albania are not transparent with their customers and charge higher fees even compared to regional branches in the Balkans, creating barriers in the use of banking services in Albania.
The study showed banks often charge fees in euro and not in the national currency, lek, for some services such as current accounts or cheques putting consumers at risk of facing negative currency exchange rate effects. The monitoring also revealed second-tier banks in Albania, which are overwhelmingly foreign-owned, apply different fees for the same services and do not notify their customers when commissions increase, violating the regulation on the transparency of banking products and services.
Lack of transparency was also observed in lack of flexibility of demand in banking services which makes analysis of effective competition among market operators difficult. Another problem observed by the competition watchdog is that not all 16 banks operating in Albania have websites, failing to provide information in the Albanian language.
“Comparison with service tariffs in regional banks, within the same banking group confirmed that banks operating in Albania apply higher banking service tariffs (such as commissions charged for closing current accounts, maintaining accounts, and plastic cards) compared to their counterparts in the region, making the customer access to these services and the possibility to change the bank more difficult,” says the Competition Authority.
The Authority recommended the central bank to strengthen the implementation of the legal framework in cases when commercial banks unilaterally increase their fees without informing customers, and take measures to increase the banks’ transparency by obliging them to update working conditions information on their websites.
The Authority also recommended that the Consumer Protection Commission at the Economy Ministry should push for a legal initiative to establish an Ombudsman to protect consumers from banking sector abuses.
However, Albania’s Association of Banks rejected government accusations that banking fees are too high, saying a study it had commissioned showed fees were on a par or cheaper than those in the rest of the region.
The Association of Banks (AAB) said its study of nine countries — Albania, Bulgaria, Croatia, Cyprus, Greece, Kosovo, Macedonia, Serbia and Turkey — compared fees and commissions of 20 typical retail banking products, related to accounts, e-banking, cards, and payments.
“It shows that of the 20 items compared, Albania is either on a par or cheaper than the countries in the region in 17 products, while slightly more expensive in three products, on average,” AAB said in a statement.
