THE Reserve Bank of Zimbabwe (RBZ) has vowed to take action against banks that fail to review exorbitant service charges which are eroding servers’ deposits and forcing people to keep their money out of the formal banking system.
Authorities say high bank charges are discouraging savings with individuals and corporate organisations having to fork out up to US$40 in monthly bank charges.
Figures obtained by New Zimbabwe.com show that individuals are charged between US$1.50 and US$5 for a single withdrawal while companies pay up to US$10, depending on the amounts involved.
Early this month the RBZ gave local banks a two-week ultimatum to review the service charges and interest rates with governor Gideon Gono insisting the problem was “an aberration he would address urgently”.
“Funds deposited into banks are supposed to appreciate rather than depreciate. I am against the charges being levied by banks on deposits and I am going to address the anomaly in the next 14 days. Unfavourable service charges would be dealt with successfully,” said Gono at a symposium organised by the Affirmative Action Group (AAG).
“I have already dealt with the collateral challenges and the issue of interest and bank charges should not be a problem. There is need for banks to lower interest rates,” he said.
Banks are charging up to US$6 dollars to maintain individual accounts while corporate bodies pay as much as US$10. Inter-account transfers cost between US$1 and US$5, depending on the bank for both individuals and corporate.
Service charges for salary processing tariffs cost between US$2 and US$4 per entry for manual salary payments. Unclaimed salaries cost between US$4 and US$7. Facility negotiation fees for companies cost about 5% of the value of the overdraft or loan while between US$4 and US$8 is charged for stop orders.
Accounts closed within six months attract a penalty of between US$18 and US$25, while reactivation of a dormant account cost between US$20 and US$25.
AAG national president Keith Guzah said high bank charges were forcing people divert money from the formal banking sector. He also accused local banks of not supporting the small and medium enterprise (SMEs) sector which he said was critical to economic growth.
“Bank charges and interest rates should attract savings. This applies to all banks. They (banks) should do more to support SMEs, is critical to economic growth,” said Guzah.
“Our hope is that the banks develop flexible lending strategies and realise the importance of supporting SMEs. We now have new banks in terms of ownership, but the mentality is still the same when it comes to lending and banks charges.”
The AAG boss said warned that the country’s indigenisation programme could fail unless banks come up with programmes to support local businesses.
“As AAG we are not expecting to be advanced money that is not accounted for. We are just pushing for the provision of programmes that we can participate in and boost economic growth,” said Guzah.
Official statistics indicate that more than 70 percent of Zimbabweans are employed in the informal sector. It is also estimated that more than US$2 billion is circulating in this sector.