BoA adopts new changes to increase customer transparency

TIRANA, April 11 – Albania’s central bank has approved some new changes to its regulations forcing commercial banks to be more transparent on the products and services they offer in a measure to protect consumers from alleged abuses. The changes to the regulation on the ‘transparency of financial and banking services’ and the “consumer and mortgage loans’ come after the Competition Authority found in a report published last February 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 amended regulations which will be in force starting from April 20 this year, foresee that banks cannot change their interest rates without first informing customers, and keep their methodology on calculating lending interest rates unchanged during the loan payment deadline.
The central bank says that the changes are aimed at bringing customer transparency at European Union standards obliging banks to publish in a clearly visibly manner on their websites and bank premises information on credit and deposit interest rates and the commissions they charge.
As far as consumer and mortgage loans are concerned, consumers can pay off their loans prematurely at a 2 percent interest rate.
The Competition Authority’s study covering the end of 2009 and 2010 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.
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. “The Ombudsman on bank customers should be established as a public authority to examine customers’ complaints about different products offered by second-tier banks.”
Latest Bank of Albania data show debit/credit payments in points of sale account for only a minority of 7 percent of total cash-dominated payments.
Prime Minister Sali Berisha said earlier this year his government would move to raise taxes for banks charging unjustifiable high fees and tariffs on Albanian consumers.
However, Albania’s Association of 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.
Last March, Albania’s central bank also approved some changes to the interbank payment system which it says will significantly lower fees for customers and increase transparency. Under the new changes, small-value payment systems in the Automated Electronic Clearing House System (AECH) will have their threshold increased up to a maximum of 1.5 million lek, from 1 million lek in an effort to increase the use of the system considering the much favourable fees it offers. Currently, AECH fees are a mere 4 lek per payment compared to the 250 lek fee applied for the Albanian Interbank Payment System – AIPS.
Governor Ardian Fullani says banks in Albania face no competition problems and that banking fees accounted only for 2 percent of the banks’ budget revenues. “I confirm that the banking sector is the most controlled and well-supervised sector, it is the most regular tax-payer as well as accountable and transparent,” said Fullani recently.