A COMMERCIAL bank’s customers who operate a business of moneylending as defined and regulated under the Moneylenders Act Cap 234 will have to withdraw their business licence by October 30 or their account transaction will be ceased by the bank.
In a letter to a customer on August 31, which was signed by Westpac Bank’s general manager Adrian Hughes, it left a “do or die” option for its customers to either cancel their moneylending licence or closure of their transaction facilities in which the 60-day notice was effective from September 1.
The bank directed its customers whether they intended to cease to provide moneylending product which fell within the ambit of the Act and they should advise the bank before the close of business on Monday. For the bank, it said this would mean that if customers had not made alternate banking arrangement by October 30 then their transactional accounts would be closed and credit balance in their account paid back to them by bank cheques.
Responding to questions, Westpac confirmed that after careful consideration, it made the commercial decision to remove customers who provided “payday” lending products and would no longer support new customers where they were aware that provided “payday” lending products.
“We are currently working with our affected customers as they source alternative banking services. We will honour existing contractual obligations as they manage this transition.”
The bank added customer confidentiality precluded them from commenting on any arrangements with specific customers.
In response to this, Consumer Council of Fiji CEO Premila Kumar said moneylenders whose accounts were being forcibly closed down by Westpac Banking Corporation in the country should be seen as merely customers by the bank and nothing more.
Mrs Kumar said it was worth noting that moneylending was a legitimate business recognised by Government.
“All registered moneylenders operate under the Moneylenders Act of 1978 (Cap 234), therefore, can they be discriminated by the banks?” Mrs Kumar asked.
Westpac justified this decision as a commercial decision and it had taken this approach in Australia as well.
However, Mrs Kumar said customers affected by this “commercial decision” could raise their concerns/complaints with the regulator, Reserve Bank of Fiji.
Mrs Kumar said the Code of Banking Practice compiled by the Association of Banks in Fiji (ABIF) suggested that the banks would act “fairly and reasonably” towards their customers.
She said this was where regulator, RBF, must step in and clear the air.
However, ABIF president Kevin McCarthy said this was an individual decision taken by Westpac and the questions should be addressed to them.
Questions sent to RBF on September 7 remained unanswered when this newspaper went to press last night.
