Business
Banking borders in EAC to disappear
Publish Date: Feb 24, 2014
Banking borders in EAC to disappear
The move is intended to make banking more convenient.
  • mail
  • img
newvision

By Samuel Sanya

Following the single tourist visa, a major deal between banking switch services in Uganda, Kenya, Rwanda and Tanzania is in the offing to unlock more value in the East African banking, finance and trade sectors.

Banking switch services allow a customer of one bank to access their account at ATM’s of another bank without opening an additional account.

Uganda currently has 5.3 million commercial bank accounts spread out in 27 licensed commercial banks. There are 13 banks on the Ugandan switch run by Interswitch East Africa.

“We are soon signing a Memorandum of Understanding with Kenya’s Kenswitch, Rwanda’s Rswitch, and Tanzania’s Umoja. Our goal is to expand to the entire African continent,” Olumuyiwa Asagba, the Interswitch boss said at the Serena Kampala Hotel last week.

“We want to be a catalyst for the East African intergration and the move towards having a cashless economy,” he added.

The addition of Centenary Bank to the Ugandan switch last week, has doubled the number of interconnected ATMs in the country to 280 from 146.

Fabian Kasi, the Centenary Bank boss, pointed out that the expanded ATM network makes banking more convenient.
He said this will lower banking costs and boost tourism and trade across East Africa.

Emmanuel Mutebile, the Bank of Uganda governor, noted that the switch service will further entrench electronic payments in Uganda and cut banking industry overhead costs currently at 7% of total banking assets (about sh1 trillion).

Cumulative commercial bank assets amounted to sh15.5 trillion at the end of December 2012. Mutebile noted that this level is unacceptably high and should be brought down by collaborative efforts.

“The adoption of IT solutions to the delivery of services will enable financial institutions to reduce spending on physical premises and on staff costs,” he said.

“The innovations are already delivering huge benefits for customers in terms of the speed, reliability and costs of making payments.”

Anthony Kituuka, the KCB head of corporate banking, said the move will be a major boost for banks without a regional branch network.

“The East African economy benefits when its citizens are able to move from one country to another and withdraw money in the local currency to pay for goods and services,” he said.

The statements, comments, or opinions expressed through the use of New Vision Online are those of their respective authors, who are solely responsible for them, and do not necessarily represent the views held by the staff and management of New Vision Online.

New Vision Online reserves the right to moderate, publish or delete a post without warning or consultation with the author.Find out why we moderate comments. For any questions please contact digital@newvision.co.ug

  • mail
  • img
blog comments powered by Disqus
Also In This Section
Mobile money customers shoot to 19.5m
Registered mobile money customers have increased from 17.6 million to 19.5 million between June 2014 and June 2015, the central bank has disclosed....
COMESA in drive to harmonise grain standards
The Common Market for East and Southern Africa (Comesa) met Friday to kick start the process of harmonizing standards of maize grain across the region, and interpreting the existing standards...
Farmers tipped on minting money from honey
A symposium of farmers from Tanzania and Uganda were told that the global demand for honey is currently overwhelming the supply in the market....
New car dealers want used motor vehicles phased out
As Uganda prepares to launch its first locally manufactured automobile to the market in 2018, new car dealers have appealed to the government to begin phasing out the importation of used motor vehicles on the market....
Export Promotions Board to train traders
Lack of awareness of trade procedures at border points among small scale traders is to blame for the low exports....
EAC countries told to invest in livestock for export
EAC countries must come up with strategic investment plans to address impediments to the productivity of livestock in the region to increase the regions GDP....
Do you support KCCA'S move to ban campaign posters from the city?
Yes
No
Can't Say
follow us
subscribe to our news letter