A steep hike in the charges to small businesses for depositing cash with the banks is "crippling the small businessman/entrepreneur," says Tony Ball, a motor dealer who runs a service station in Durban.
"Up to now my bank has charged me 22c for every R100 cash deposited," he says. "A service station is very cash orientated. The plus side for my bank is that daily they can expect large cash deposits which saves drawing from central treasury.
"In mid July this was increased to 50c for every R100. The bank's response to my query was that due to crime the banks want to decrease their cash holdings to make them less attractive targets. This is going to cripple cash business countrywide."
Ball does not name his bank but it is believed that an increase in charges has been implemented by several banks on cash deposits for small businesses.
Asked to comment on behalf of the banks, Len Schutzler, senior general manager retail banking division of Standard Bank, says if Ball's service station is one of Standard's customers he would encourage Ball to write to him.
The reason banks have put up charges on cash deposits is less the risk element than the costs of handling coins and notes, he says. Costs also include insurance and there is a need to protect staff and customers from violence.
These costs are not necessarily offset by the saving of not having to draw from central treasury. The bank has to draw from central treasury as a matter of course because its cash requirements vary during the month, and it sacrifices investment returns by holding surplus cash.
Schutzler suggests Ball encourages his customers to use garage cards. This will not save money because the service station has to pay a charge similar to the cash deposit charge, but it will eliminate handling cash.
Whatever the ins and outs of the argument, Personal Finance would highlight a point made by Ball a doubling of bank charges overnight shows an indifference on the banks' part to their small business clients.