Bankom Uganda Ltd’s monopoly of inter-banking ATM service not good for economy
Oct 28, 2004
SIR— I am writing in response to recent press reports that a company, Bankom Uganda Ltd, has been cleared by both the Uganda Bankers Association and the Bank of Uganda to be the exclusive providers of the inter-banking ATM service.
SIR— I am writing in response to recent press reports that a company, Bankom Uganda Ltd, has been cleared by both the Uganda Bankers Association and the Bank of Uganda to be the exclusive providers of the inter-banking ATM service.
This means that a Nile Bank customer, for example,
can draw or deposit money at any ATM of say Standard Chartered or Barclays or Stanbic manned by Bankom Uganda Ltd.
What in effect this means is Bankom Uganda Ltd has been given the monopoly to run that sector.
However, while monopolies have their advantages, their disadvantages raise more concern.
In an era of a liberal economy, we need to have many firms offering the same service so that it is not costly. Remember how expensive it was to purchase a fully-connected mobile phone when Celtel were the sole operators. Now, with the emergence of MTN and utl Mango, a phone can go for as low as sh100,000. Service fee is now a thing of the past!
While ATMs currently charge up to sh200-300 per withdrawal or deposit (depending on the bank), what is Bankom Uganda Ltd going to offer?
I therefore challenge the Bank of Uganda and the Uganda Bankers Association to explain to the public why they are allowing only Bankom Uganda Ltd to operate a monopoly in the banking sector of the economy.
To the best of my knowledge, monopolies should be discouraged as they only serve to enrich the owners, in this case Bankom Uganda Ltd, without taking into consideration the concerns of the customers/nationals.
It’s not too late to save the situation.
Christopher Bulwanyi
Kampala
This means that a Nile Bank customer, for example,
can draw or deposit money at any ATM of say Standard Chartered or Barclays or Stanbic manned by Bankom Uganda Ltd.
What in effect this means is Bankom Uganda Ltd has been given the monopoly to run that sector.
However, while monopolies have their advantages, their disadvantages raise more concern.
In an era of a liberal economy, we need to have many firms offering the same service so that it is not costly. Remember how expensive it was to purchase a fully-connected mobile phone when Celtel were the sole operators. Now, with the emergence of MTN and utl Mango, a phone can go for as low as sh100,000. Service fee is now a thing of the past!
While ATMs currently charge up to sh200-300 per withdrawal or deposit (depending on the bank), what is Bankom Uganda Ltd going to offer?
I therefore challenge the Bank of Uganda and the Uganda Bankers Association to explain to the public why they are allowing only Bankom Uganda Ltd to operate a monopoly in the banking sector of the economy.
To the best of my knowledge, monopolies should be discouraged as they only serve to enrich the owners, in this case Bankom Uganda Ltd, without taking into consideration the concerns of the customers/nationals.
It’s not too late to save the situation.
Christopher Bulwanyi
Kampala