Far from increasing their services to low-income customers, banks will have no option but to withdraw from this market unless they can generate satisfactory returns on the capital invested.
This is the Banking Council's answer to criticisms that banks are neglecting poorer consumers.
Retail banking the provision of services to the public is the least profitable part of the banks' activities, says the Council. Investment and merchant banking is much more profitable in terms of returns on shareholders' capital.
And if the banks had to serve the whole market without taking into account economic considerations, they would either fail in their duty to depositors, or short-change their shareholders, or both, says the Council.
The Council says it is conscious of problems of people who can't open bank accounts, borrow small amounts or use the banking system to pay accounts.
Banks are consulting with microlenders, the Registrar of Banks and others to work out ways to provide alternative, safe, competitive and good quality services to fill the gap.
Steps taken already include:
* The banks have helped to devise ways of financing low-cost housing;
* Five banks are in a pilot project with the government-initiated Khula Enterprises finance scheme to provide loans to micro and very small enterprises;
* The Banking Council is working on a code of conduct based on the British code; and
* An independent Ombudsman's office is in the pipeline.