Equity Bank has announced that it will start charging an annual fee for all its debit cards.
The said fee is KES 240.
According to the lender, the new charge is basically a service fee recovered once a year and applies to all debit cards.
The bank adds that the charges are recovered on the anniversary of the month when the card was issued and run until when the card expires.
Some customers have already received a notification from the bank for this new development.
Equity is the leading bank in Kenya by sheer customer numbers. It serves more than 10 million customers locally alone and has thousands more in other markets.
Assuming the majority of its customers have active debit cards, then the bank is set to earn more than KES 2 billion from the charges alone.
The annual fees apply only if the card is active. The charges will not be applicable to customers whose debit cards have expired.
Customers should also check which tariff is associated with their accounts to establish all hidden costs they might not know about.
To note, most local banks do not charge such fees for debit cards. It is for this reason that some customers have raised concern over social media platforms, citing that the bank has a lot of hidden charges, making its offerings an expensive affair.
Nonetheless, it is speculated that the bank wants to improve its earnings, hence this decision.
Specifically, Equity reportedly wants to boost its non-interest income from retail clients who, in the past, paid a one-time fee when picking or renewing debit cards.
While the bank has been focusing on digital banking, some customers still hold onto their cards for online payments or withdrawing cash from ATMs. Equity has also been closing some of its ATM outlets because customers have since found online banking easier.
Overall, the move is controversial and will see some of its customers move to other lenders, adding to the fact that the bank has a bad rapport in terms of how it handles fraud cases reported by customers from time to time.