Know thy banker!

I made triple losses to my former banker; losses that were borne of: account opening charges for three bank accounts; exorbitant charges during the time my bank accounts were open; and Ushs 20,000 for closing each of my bank accounts.

I could have avoided those loses and such a painful experience if I had paid close attention to bank charges on my accounts by my former banker.

Anyway, one time, I noticed that the balance that I expected to have been on my account was lower than I thought it should be. I decided to request for bank statements from my bankers covering the whole of 2010 and the first quarter of 2011.

To my utter surprise, I found that during a seven month period, July 2010 to January 2011, the monthly bank charges on my account more than doubled.

Furthermore, I noted that my bank charged me for both outward transactions of money coming out of my account and for inward transactions of money coming into my account.

The charges on outward transactions included:

  • ATM withdrawal
  • Cashing cheques at the counter
  • Cheques drawn from account
  • Internal transfers to client’s other account within the bank.

The charges on inward transactions included:

  • Other cheque deposit
  • Counter cash deposit
  • Telegraphic transfers from another bank into bank account,
  • Internal transfer from client’s other account within the bank

Of all the charges, only the ATM charges were clear. This is because they were automatically charged per ATM cash withdrawal. The others were charged out in form of a fixed monthly service charge of Ushs. 10,000 and what was referred to as “transaction charge”, which varied monthly.

The monthly service charge was not new to me. Since I opened my accounts, three years prior, it has been charged. I had assumed that the service fee was justified on grounds that it covers such costs as the monthly transactions on the account. That is why the new “transaction charge” was not clear to me.

I went to one of the managers of the bank branch that I frequented. I asked him to explain to me how the “transaction charge” was arrived at. He told me that it was Ushs. 1,500 per transaction.

In rapid succession I then asked:

  • What is the service fee for?
  • Does it mean that the bank charges me twice, when I move money from one of my bank accounts in the same bank?
  • Does it mean the bank charges me for bringing money into the bank?

I noticed from the facial expressions of the branch manager that he too found this charging system quite baffling. He explained that he was ‘new’ on the job and that the charges on my account were done before he had joined the bank.

Shortly after my complaint, the bank reverted back to only charging one of the monthly fees, the “transaction fee” and it did not charge the service fee at the same time.

I had falsely hoped that the bank would decide to refund me either the Ushs. 70,000, which it took from me as bank charges or Ushs. 51,000, which it took from me as transaction charges during the seven month period. It never did to the day that I closed all my accounts.

Post featured photo credit: Red Pepper

8 responses to “Know thy banker!”

  1. Presumably, one receives a disclosure of all fees and charges, in writing, from the bank when one opens a bank account in Uganda? Are the banks also obligated to informing you of their intention to make any changes to this agreement? My old friend Philip and James could perhaps embark on a bank rating system, for the common man, based on, among other things, transparency and actual magnitude of these fees and charges. It is also bothersome that may folks with the responsibility on making financial decisions on behalf of the nation are they themselves financially illiterate.

    Liked by 1 person

    • Yes, Victor. It all centres around financial literacy. Many are financially illiterate, the banks know that and so they exploit them to the maximum …


  2. To add salt to the wound, so to speak, Mr. James Abola has posted this comment on my face book wall: “Norah Owaraga, yesterday my other friend Phillip Karugaba asked what I could do for the apparent financial literacy need of MPs. As I told Phillip during the orientation of the current parliament I was asked twice to prepare financial literacy presentations and on both occasions I was left hanging without saying a word. I therefore tend to agree with the Rt Hon Speaker that her colleagues are impervious to good financial counsel – and it is a pity to see a similar cycle repeated in every parliament.”


  3. Norah this has clearly been one your most treasured lesson to some of us who have three bank accounts. I have never minded to know how much these banks collect from my savings and salary accounts. Now will pay a visit to one that holds my savings and see if they are eating into it or helping me actually. Thank you for this lesson. A wise persons learns from others’ experiences while a fool will wait to learn from his experience. No pun meant on you but i have gotten some financial Audit tips

    Liked by 1 person

    • Eyalama, thank you! And you really need to ask why you as an individual person needs all the three bank accounts …


  4. And more over there is plenty of useful advice available – but perhaps because it is in good books such as James Abola’s “Make sense of your money” that is why our MPs miss it. James as assured me that in the book ‘banking and debt is excellently covered.” The book is readily available at Aristoc and for us with e-readers there is an ebook version as well.


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