RM1 billion - that is how much we, the Consumers Association of Penang, estimate that banks earned from service charges and fees in 2004. Our estimate is based on the latest annual reports of nine banks where the combined total income from service charges and fees was already RM700 million in 2004.

There could not possibly be an easier way for banks to earn RM1 billion.

After all, what the banks have done is to charge consumers for banking services which were provided free or simply increase the amount of fees it is already charging.

Banking is a necessity commodity. This does not mean that banks have the right to take advantage of the weak bargaining position of consumers. Below are a few examples of the many service charges and fees that are simply indefensible.

RM200 for a brief local call? That was what Bank A (Southern Bank Bhd) charged its customers for informing them that they had to top up their current account if they wanted their cheques to go through. To be more accurate, the fee was RM200 per cheque, so if eight cheques were involved, the bank charged RM1, 600 even thought just one phone call was made.

On top of that there was still a RM200 charge for each cheque presented when there is insufficient funds. In all a customer of Bank A could end up paying RM400 for each cheque issued..

However, Bank Negara Malaysia (BNM) has informed us that with effect from May 24, 2005, the bank is no longer allowed to charge for the phone call and that it can only charge RM100 for each cheque presented when there is insufficient funds.

Another bank (Standard Chartered Bank Bhd) thinks that it is fair to doubly penalise those who are late in their payments. It charges RM100 as administrative charge on top of the late penalty charge levied on late loan payments.

A 150 percent increase in the fee for banker's cheque? How did the cost of issuing a banker's cheque go up 150 percent for a premier bank (Maybank) to justify the increase of the fee from RM2 to RM5?

When petrol and diesel prices went up in May this year, the Ministry of Domestic Trade and Consumer Affairs called upon the manufacturers, traders and those in the transport business not to increase their prices as consumers would be badly affected.

But in the last two years, banks have either been increasing their fees or introducing new fees, but no one has been telling the banks not to do so. The increases are over 100 percent and yet nothing is done about them.

Since fees are so lucrative, it is not surprising that banks turn a deaf ear to the frequent complaints from consumers. But should not BNM be helping consumers? Apart from the introduction of the Basic Current Account and Basic Savings Account, there has been little other action taken by BNM to give hope to consumers.

BNM has said that for existing fees and charges, banking institutions are required to provide rationale and justification for imposing such charges. To introduce new fees or increase exiting fees, the banks need BNM's prior approval.

If fees have to be brought to BNM's attention before they are withdrawn or reduced, it means that BNM has not been checking out whether the fees are justified.

If banks can continue charging the other fees that are unreasonably high, it means that they have BNM's tacit approval. Equally disturbing about BNM's approval of the fees is the question of BNM's authority over the banks.

In the case of Bank A, BNM asked it to refund part of the fees to the complainant but the bank refused. BNM then asked the complainant to file an appeal with Bank A. If Bank A can refuse BNM's request, what chance does the complainant have with her appeal?

The refund involved is mere pittance to Bank A but it chose to ignore BNM's request. So how much 'moral persuasion' power does BNM really exert over the banks?

To prove to the banks and BNM that consumers are not going to tolerate fees which are absurdly high, we suggest that consumers flood the Ministry of Finance with their complaints and carbon copy each letter to BNM.

The writer is the president of the Consumers Association of Penang.