Senators have asked the National Bank of Rwanda (BNR) to tighten its supervision on financial institutions, especially commercial banks, which they accuse of exploiting Rwandans through high interest rates and other charges.

They made the call yesterday while assessing the central bank’s 2017-2018 report.

The MPs said that commercial banks and other financial institutions were charging citizens very high interest rates on loans and extra fees to pay for government services and taxes.

The MPs asked the central bank to intervene and stop banks from charging people and businesses when they are paying taxes.

Small businesses and individuals who don’t have bank accounts are asked to pay extra fees when paying taxes through Rwanda Revenue Authority (RRA) bank accounts.

Bank of Kigali charges Rwf500 while some banks charge even more.

Senators, including Evariste Bizimana, said that the fees are unfair and need to immediately be stopped because the tax collection body already has accounts with the banks and the latter should just facilitate payments.

"There is no justification for these fees,” Bizimana said.

The Senate’s Vice President in charge of Legislation and Oversight, Fatou Harerimana, agreed with Bizimana that there is no need for banks to charge extra fees to citizens trying to pay their taxes.

"If RRA has an account with BK, why would they (clients) be charged more money in order to deposit their taxes?” she wondered.

She also called for harmonisation of prices for Irembo services because different agents charge different amounts of money to citizens trying to pay for different government services.

The MPs also asked BNR to continue talks with banks to ensure that interest rates charged to their clients seeking for loans are reduced from the current 17 per cent interest rate that most commercial banks charge.

For Senator Mike Rugema, it doesn’t make sense when the central bank continuously reduces its Key Repo Rate (interest rate at which banks borrow money from the central bank) while commercial banks maintain the same high interest rates for their clients.

"We need a meeting with BNR about monetary management in this country,” Rugema said.

The senator wants the central bank to address the issue of high interest rates charged by commercial banks and explain how the bank monitors electronic transactions done through telecom companies and ensure security for money deposited with them.

The Senate resolved to call a consultative meeting with BNR to seek clarifications on how the bank is working to ensure effective and safe financial management in the country.

editor@newtimesrwanda.com