Bank reform crucial
(China Daily)Updated: 2006-12-09 11:22
It is ironic that domestic banks like the ICBC, which are spending heavily nowadays to equip themselves with up-to-date computer systems, are still sticking to outdated rules that were applicable during the era of manual calculation.
Moreover, the failure of domestic banks to update rules that might erode some of their profits contrasts sharply with their eagerness to introduce various service fees in the name of international practice.
For instance, along with other domestic banks, the ICBC imposed fees on small accounts early this year as part of measures to boost its bottom line, regardless of domestic clients' complaints.
It may be an international practice to charge fees for the management of small savings accounts. But it is also common practice for modern banks to calculate interest in line with the actual term of the deposit.
To attract investors when floating their stocks on overseas and home stock markets, Chinese banks have tried every means to beef up their profitability.
Nevertheless, when it comes to domestic service, many of them still put their interests above that of the public.
The above-mentioned case involves only a small sum of about 100 yuan (US$12.7). But it serves as a litmus test on the willingness of domestic banks to carry out internal reforms. Some of these reforms might be painful at the moment, but they are crucial to securing Chinese banks' long-term competitiveness with the support of domestic consumers.
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