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Dear Banks and Lovely Loanees

bigstockphoto_Bank_Column_261172Banks are wonderful institutions that help keep the whole economy running. If they do not exist how can one deposit money safely, apply for a loan to purchase products, or mortgage one’s dream house? Without bank accounts how can students receive their allowances and government employees their salaries? On another hand banks also provide businessmen financial leverage to start or expand an existing business.     

As years past many services have been rolled up to enhance consumer experience. Internet banking, ATM debit cards, branches propping up here and there, and new financial menus for consumers to invest or dabble in. Needless to say applying for credit is getting easier and faster.

However these wonderful banks have its faults and inefficiencies. Ones I wish to point out to the decision and policy makers, both in private sectors and public. Having studied outside the country for over a year, it has given me insights, albeit sufficient ones, to help compare how the banks in UK and in Brunei perform. Let me forewarn readers first that my critic is intended to improve existing services and eventually help protect the consumer from going into the bottomless pit of debt and businessmen into improving their efficiency.

Firstly, the bank queue is so long that it makes Ayamku staff professional. Now I have nothing against those sitting behind the counter but I do have on someone who wastes 20-30 minutes of my life. If the whole place is packed with people then I would understand but nothing is such the case here, whereupon I experienced the mentioned problem with only 4 people waiting in line. Where were the clerks? Waiting behind the counter counting their cash or talking to their colleague all for over the time period stated. In Lloyds TSB bank, UK the average depositing or withdrawing or over-the-counter banking transaction period(whatever you call it) is less than that of Ayamku serving you Nasi Ayam Chicken Spring.

“Sir, I see you do not have a debit card.” eventually says the lady behind the counter. “How much is it” say I. “BND$20 per year”. Think of it and let it sink: BND$20 per year. BND$20 per year!!!! That amount is so massive that it alone would destroy the accumulated annual interest gained-for instance here is 2%-for depositing over BND$1000 worth of my capital in the bank. The advantage of having that debit card is that I can withdraw in their ATM machines. Is it the same in the UK? Those bankers wish, however thanks to their Financial Services Authority(FSA), doing so would lead to banking penalties. And with the wide-ranging options consumer get in their market, doing so would lead to economic suicide. Nothing can be said the same here.

Thirdly, we let our government employees get exploited into debt. Humans are subjected to whims and desires that economists call unlimited wants. With a mature outlook in finance one can utilize these access of credit for good use. However that can not be said the same for over 60%(or more) of the employees. They misuse and misplace their finances into purchasing things they could not afford. I thank the former minister of finance in curbing the credit fiasco that happened somewhere in the mid-2000s. Because banks are just too happy to exploit employees ‘unlimited wants’ largely thanks to their governmental background(with their permanent salaries) with blocks after blocks of interests and loans. And it surprises you why an average governmental employed family can ‘afford’ 5 to 6 cars? If this is not called parasitical then what is? Regardless of the law that inhibit over-credit this matter still happens.

What happens then to a family drowned in deep debt if it does not lead to broken relationships, low self-esteem for the family head, and eventually poor education and upbringing for a child? Where do government employees get the permanent salary if not from the source of it all: Oil and Gas? This trickle-down-wealth-to-the-people has largely been absorbed by the banks through loans and interests! And we are moving towards islamic finance, eh?

Finally, internet banking here is so bad here it spills onto the students ability to get allowances on time. This article is partly motivated to correct the financial officers negligence. How many months have students been subjected to these things, I dare not count or mention except of course the article entitled “Why must students suffer waiting for their allowances?”. But apart from bureaurcatics ‘mistake’, the banks here too have to be scrutinized. Why? For instance Bruneian students in UK never had to face such frequent disruption students here have to suffer. And Brunei Hall, which is the main administrative body in UK overlooks over 1000+ students has only less than 50 administrative workforce. Why? thanks to the UK banks’ internet banking! An administrator only has to input a yearly standing order once or twice a year for one student for their monthly allowance, and when it is confirmed you can be dead sure it will be transferred every month. Can the same be said to the banks and their internet banking here?

To conclude there are a lot of things these wonderful banks in Brunei have to offer. Ones which they should look out for is the improvement of bank ques, charge-free debit card, ethics in borrowing money to those who can afford it not make them victims of it, and a massive overhaul in internet banking. The problems mentioned, if studied by bankers and decision makers, can be an opportunity to get that next ‘banking excellence award’ banks proudly post in their promotional ads. Because really isn’t excellence all about improving customer service? and isn’t customer service not all about the customer?


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4 thoughts on “Dear Banks and Lovely Loanees

  1. Having read your article in the BT paper the other day, I have to say your article, though with good intentions, is not really a worthy article. You have some good points but lack the necessary understanding of why. I’ve worked in the banking industry for 8 years now and as like you, I too spent 4 years studying in the UK. I understand your comparisons and your frustrations about our “wealthy country’s crappy banking system”. In the UK and many other larger countries, populations are in the millions, and so banks have millions of customers. The Bank of England set the maximum interest rate at 7-8% (rough figure…) so banks could charge more. UK banks have all sorts of charges/ penalties which they rake in from their customers. So, if they only charge 1% of their total customers $10, they still earn $1m (rough figure). In Brunei, with a population of 400k, even the biggest bank probably has a maximum of 100k customers. AMDB has set a max interest rate of 4.5% (as to control inflation , banking stability etc etc). And there are not a lot of penalties and charges here in Brunei, except for yes setting up accounts and maintaining an account. And not everyone has to pay the yearly fees as if you deposit enough money, the account is “free”. So, 50k customers being charged $20 brings the bank $1m. So you see, it’s just a way for the banks to remain in business. They are after all a business first, not a charity.

    With the credit issue, the issue that you mentioned is not unique to Brunei, but it even happens in the UK. Now I have to say yes this matter that needs to be looked into and I agree with your point but not your method. Banks love government employees wherever in the world they are. In fact the situation is better in Brunei as the government has set a maximum interest rate of 4.5% on interests or loans (vs 20% in UK). If you point out that the banks should’ve limited their credit, yes you are right. The fact that prior to these recent years, there has been no credit checking bureau in Brunei where banks could look into the database for a customer and look through his credit history. Now that it has been established, it is up to the individual banks to fully utilise them.

    Thirdly with the internet banking, this is mostly the government’s shoulder to blame. Every month or so there will be an article in the local paper of a student complaining that his/ her allowance is late again. The fact is, the internet banking in Brunei is relatively efficient where you could easily set up standing orders. This is how Brunei Shell transfers their allowances to the scholars abroad, with no fuss. It is no different to government employees receiving their salaries, as that too is via a monthly standing order. The problem here is with the individual department within the unnamed ministry. Brunei Hall in UK has autonomy over it’s daily operations, where the same cannot be said with their Bruneian counterpart.

    Point by point, you sir have a good case but a relatively shallow mindset (not humiliating you…). This subject matter is one that cannot be compared vis-a-vis on paper but needed with a holistic view.

    I strongly encourage you to keep writing on issues affecting our modern lives, but it needs to be based on thorough research. We don’t want another “Fox News” over here…


    Posted by Stumbled Upon | July 29, 2013, 12:21 pm
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    Posted by USMAN HANG | June 13, 2015, 12:18 am

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