Local banking brands, the writing is on the wall

On Wednesday I went to the BCR branch in Novotel to cash a cheque. This was a cheque which a colleague had written to me as a ‘small loan’ as I was dead broke. Upon reaching the teller, she told me that I could not access the cash. I called my colleague to come over as I feared that she did not have the cash that she had promised me. Upon reaching Novotel she quickly wrote another cheque in front of the branch manager as I was later told that her signature ‘was not correct’. She wrote a fresh cheque as she was used to such antiques by BCR staff. Despite the owner of the account being present and even after cross checking the signatures of the two cheques presented to the two BCR officers, still they were not convinced that it was a genuine transaction we were carrying out. They checked their records thoroughly but still the teller had the audacity to ask her boss to authorize the small withdrawal I had presented. I got the money after spending close to three hours at BCR. What is the moral of my story? I think the local banking brands need to style up their operations. If anything the writing is on the wall for the banking industry. Foreign banking brands are lining up to be counted in Rwanda. Rwanda’s banking industry is receiving a lot of attention from other countries. So naturally competition is going to heat up. KCB Group, East Africa’s toughest indigenous banking brand came in with style by opening 8 branches in Rwanda all at once. Another top indigenous Kenyan banking brand Equity Bank has given notice of its intent to enter the market. Equity has won very many prestigious awards globally. It is also loaded with big time cash and top notch expertise to boot. All these glaring signs seem to mean nothing for the local brands. They are not moved at all. Otherwise how do you explain the glaring lack of expertise on the basics of banking such as the rude customer service shock I encountered at BCR Novotel branch? Banking is a serious profession. It is like medicine, law, engineering and stuff like that. I really doubt whether the local banking fraternity has the specialized personnel it ought to have in areas such as personal banking, corporate banking, investment banking and even mortgage finance. Otherwise how do we justify BCR’s freezing of its mortgage business recently? Especially after borrowing from the public a whooping Rwf 4 Billion through a bond issue to develop their mortgage book only for them to announce a freeze? Are they too blind to see what is happening around? Don’t they know that Rwanda’s construction industry is booming? Don’t they have fears that such moves are likely to negatively impact on the ‘BCR brand’ within the public domain? Let us put a pause on BCR.I think the Central Bank needs to move in with a tougher mode of supervision. This should cover the minimum standards of expertise as banking is a service. Failure to meet such standards the regulator ought to look at alternatives like merging these banks especially those with below par levels of operations into relatively better and economically viable entities. Otherwise they risk being wiped out by real banking entities. The banks should look at Government. RBD brought 8 small parastatals into one super board. Soon we are going to have the Rwanda Education Board and Rwanda Agricultural Board brought into being and fashioned out in similar terms. In conclusion I wish to quote Central Bank Governor Francois Kanimba on his annual Bank Supervision Report 2007. ‘Our financial sector is required to meet all the internationally accepted principles and best practices for achieving a sound financial system and to adapt them to its particular context’. Kanimba added that ‘there is no future for the ‘island of the unregulated’. He was tough by saying that ‘professional experience, under its various aspects has constantly to be improved, because a well trained staff constitutes an essential element for the competitiveness and the attractiveness of our sector in the long term’. He even added that ‘more than ever before, finance professionals have to place client’s interests at the centre of their concerns because a satisfied client is the basis of a prosperous financial sector’. Did BCR read this report? My series on Federating East Africa continues next week…Rwanda will be examined next ojiwah@gmail.com