The Office for Competition will meet the banks in the coming weeks to discuss recommendations made with regards to their charges and practices.

“The Office will have to first wait for the outcome of these meetings before deciding any further steps it might take,” the director general for competition Godwin Mangion told the Business Observer, distributed with Times of Malta.

“It will take any necessary action by imposing remedies and/or fines only in the case where it finds an infringement of the Competition Act.”

Last year, the MFSA and the Office for Competition within the Malta Competition and Consumer Affairs Authority were asked by the Finance Ministry to review banking charges and loans to SMEs respectively with a view to improving competitiveness. 

The Finance Ministry commissioned the investigation following calls from both local and international institutions, including the Central Bank of Malta and the European Commission, expressing concern over “high interest rates” which could increase SME costs and “erode the country’s competitiveness”.

Mr Mangion noted that the report concerning interest rates charged by banks on SME loans issued by the Office for Competition formed part of a sector inquiry in terms of the Competition Act.

“Under the Competition Act, where the trend of trade, the rigidity of prices or other circumstances suggest that competition may be restricted or distorted within the Maltese market, the Director General may conduct an inquiry into a particular sector of the economy,” he explained.

The report on bank charges was issued by MFSA, the regulator for the sector.

MCCAA recommendations (July 2015)
• Free of charge quotations for SMEs
• More information on business loans (also in Maltese)
• All charges to be listed on bank websites
• Restricted information on future pricing
• EU-funding through more than one bank
• Encourage SMEs to shop around
• Government to set up credit register

MFSA recommendations (October 2015)
• Review charges for incoming and outgoing payments.
• Reduce and cap charges to retail outlets for use of local debit cards
• Review bank charges on loans, particularly for businesses
• Assess renewal fees for their reasonableness.
• Reduce charges for credit transfers
• No additional fees for withdrawals from third party ATMs

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