Colombia: A banker's paradise revisited

There are a lot of things that can irk expatriates here in Colombia. After a time, most come to learn that the best way to deal with them is to, well, not deal with them. Either grin and bear them or laugh them off. Trying to find solutions to whatever may be bothering you is generally a futile exercise.

Davivienda; nice little bank... (Image from Facebook.)

However, like it is for the opposite sex (whichever that is for you) and pretty much all over the world, the majority of us have found – usually to our annoyance – that we can’t live with or, more pertinently, without banks.

Thus, I find it a little more difficult to simply "let it go" when it comes to banking in Colombia. This is a topic I wrote about before; the fact that I still have a bank account here shows that I have learnt to take the punitive hits somewhat. Every now and again, though, the red mist descends in relation to this whole area.

You see I still don’t understand why my bank, Davivienda, charges me 9,500 COP (Colombian pesos, just slightly under four euro) per month to have what is quite erroneously termed a savings account. Or maybe the savings refers to what Davivienda makes with my hard-earned cash? The title makes a bit more sense if you look at it that way.

Whenever I question Davivienda employees about this, some of whom I have worked with in a freelance capacity, they explain the fee as the cost of managing my account, along with the peace of mind that my money is secure. Fair enough on the second point, but don’t they use my deposited money to lend to other people, generating handsome revenue for themselves?

As for the management of my account, heck they must be flat out there. For one, the last time I used my debit card to make a transaction was in April of this year. When it comes to making deposits, I’m the one that does it, in person, standing in ridiculously slow-moving queues to do so. It should be me asking for a fee (or interest as we call it for savings accounts in Ireland and the UK).

Now, in fairness, I do get sent a text message each time there is account activity; that includes when I go on line to view the status of things (alas, it’s not that great). So perhaps the random figure of 9,500 COP is used to put credit into Davivienda’s pay-as-you-go mobile phone. They must be damn expensive text messages at that. Just don’t forget to send me a birthday text guys; it will all have been worth it then.

To add further insult to injury, I was told that if I had a nominated account i.e. one in which an employer deposits my wages, I wouldn’t be charged anything. The snag here is that I don’t have a full-time employer. 

So it seems if you’re a freelancer, trying to make it on your own minus all the relative security and benefits of full-time work, you get even more screwed by the system here. Of course, there’s a fair chance I’m missing a trick or two; for if there is a simple way to avoid these fees, the banks will be the last ones to tell you.

It must be said that it’s not just Davivienda that’s at this – it’s basically the same with them all. It’s the way things operate here. The international banks must love it.

Plus, for many hard-pressed, working-class Colombians it’s not an issue. They either have the aforementioned nominated account or just don’t have an account at all. Under the mattress is best for the majority.

Indeed, it appears banking in Colombia is either for the very rich (who tend to get fees waived) or idiots. At the moment I fall into that latter category.

I suppose somebody’s got to contribute towards those semi-comical Davivienda advertisements (see video above). Wrong Way, always giving.

Colombia: A banker's paradise

For the second time in a number of months here in Colombia we found ourselves snookered as to what to do with our cash. 

OK, it could be seen as a pleasant headache to have – better looking at it than for it, in a sense. The issue, though, on both occasions was that without a bank account, where do we put the cash we’ve (finally) built up over our time freelance English teaching in the country when we go travelling?

Safe haven: cash under the bed.

You see, it’s not a problem when we stay in Bogotá. We just keep it tucked away in safekeeping, accessing it when we need to. 

But going on the road with a relatively nice bit of "real money" – enough, in any case, that we certainly don’t want to lose – is not the brightest idea around these parts, or anywhere for that matter. It would be bringing ‘dar papaya’ to new levels of stupidity (see http://bit.ly/XLDyLg for an explanation of that).

Due to our visa situation and a lack of the foreigners’ version of the national identity card (a cédula extranjería as it’s known – it took Colombia immigration almost six months to get us one of those issued, getting it just six days before it actually expired) we couldn’t open a bank account back in January.

Our three-pronged cash solution for our travels back then was thus: we brought more than maybe advisable with us; we left some behind and; in an extremely generous gesture, a friend of ours gave us her bank card to use for the duration of the trip (cheers, Melissa) – so we put the remainder of our cash into that account as cover.

Now, all that worked out quite well in the end, but we didn’t feel fully in control of the situation. So for our latest voyage, one where we had to pop into neighbouring Venezuela for visa purposes,* we tried again to open a Colombian bank account. 

The game changer this time was that we had our cédula – the lack of it beforehand was the only obstacle preventing us doing business with Davivienda (the other banks, for the record, needed written proof of income, something Davivienda did not).

So cash and national identity card in hand, we go to open what they call a savings account – after all, all we wanted was somewhere to "securely" store our money while also having the ability to access it at some stage if needs be.

Standing tall('ish') - Davivienda.

‘Right, what kind of benefits do we get?’ ‘Benefits? Well, you can use the debit card to withdraw your cash at any Davivienda ATM in the country (but use another bank’s machine and you’ll be nicely charged) – get this, free of charge!’ 

‘Wow! Tell us more.’ 

‘You can also make point-of-sale and internet transactions with your card without incurring a charge from us.’ 

‘Great. What about the interest rate?’ 

‘Well that’s minimal, less than one per cent.’ 

‘Ah, that’s OK, it’s better than zero – at least our money will make something.’ 

‘Well, you are, of course, charged $9,300 Colombian pesos (COP officially – roughly US$5) per month to have this account.’ 

‘Hold on, what? We leave our money with you, money you use to invest to make more and you charge us for our "generosity"? How can you do that?’ 

‘Bienvenidos to the banking world of Colombia.’

Yep, we get charged for letting the bank play around with our money. Indeed, if the interest rate was one per cent (it’s less) we’d need to leave a minimum of ten million pesos (about US$5,000) just to break even – that's if the interest was calculated monthly, which it’s not. 

This isn’t just Davivienda (a company where we, incidentally, teach many of its high-rolling staff) we must add – it applies to all the banks; Colombian law apparently.

In fact, it seems to be a cosy cartel between the banks and the country’s lawmakers – nobody seems willing or, more importantly, legally allowed to break ranks. From what we’ve been told, even the international banks play the same game. The likes of HSBC and Citi must love things here – easy money and all that.

We don’t make any secret of the fact that we’ve never been big fans of banks, wherever in the world, but the above practices are just plain wrong. 

How the ordinary Colombian can accept it is beyond us. And, of course, it is the working- and lower-middle-class Colombians that are most affected by it. The lower classes tend not to have bank accounts – they’ve enough problems without them – while the upper-middle and upper classes either don’t really care about such charges or, perhaps more likely, have their wealth elsewhere.

A popular protest, just not about the banks, though.

At least in the other two countries we’ve banked in – namely the Republic of Ireland and the UK – we don’t get charged just for leaving our money with them. The balance we’ve left in our UK bank account – the current account that is – hasn’t budged since we departed, only for the small sums of cash we’ve taken out.

What’s more, our instant-access savings account, where we can transfer funds from this to our current account in seconds via the internet, is making money for us – not a lot, but at least it’s moving in a positive direction. It’s more or less the same in the Republic of Ireland.

Yes, "proper" savings accounts do exist in Colombia, but from what we can gather they are highly restrictive and not very practical for the average worker. So with seemingly little or no public or political pressure to change their ways, why would the banks do so?

They are on a nice little winner here. After all, it is a banker's paradise.
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*We’ll have more on what turned out to be a very positive, highly enjoyable trip to Venezuela in the coming days.