HARARE – While the Bankers Association of Zimbabwe has remained mum on the ongoing talks to find a common ground with the authorities on the issue of curbing interest rates and bank charges, we feel the subject remains of great importance.
In his 2013 national budget, Finance minister Tendai Biti barred financial institutions, or banks to be more precise, from levying charges on deposits of $800 and below while he also ordered them to pay interest on deposits of $1 000 plus held for at least a month.
Biti also ordered the banks to cap their interest rates at 10 percent per annum. The institutions were charging interests ranging between 25 percent and 30 percent, which Biti said were way too high.
From a depositor’s point of view, the reforms introduced by the Treasury chief were long overdue.
Zimbabwe’s depositors — whose majority feel they were grossly short-changed at the height of the banking crisis when their life time savings were decimated — it is time for the banks to offer something for their hard earned money.
While charging the exorbitant interest rates on loans, the banks have — since the introduction of the multi-currency system – not been paying any interest on deposits.
It seems not fair. Imagine, a customer deposits $100 into the bank and after a month it is $4 to $5 less after bank charges have been levied.
There was no longer any incentive for depositors to bank any more. You actually lose money in the process of trying to preserve it.
In some way, the banks have reduced themselves to mere channels of sending and receiving money. As soon as the money reflects it is withdrawn.
Although the banks complain, and according to reports they have asked for a grace period in implementing the “depositor-friendly” reforms, they need to more innovative in boosting their revenue.
The current situation in which a greater part of their revenue is generated from non-core business has proved unhealthy to the depositors.
On the other hand, we feel for the institutions. They are operating in a tough environment. Competition is adding salt to the wound.
Of late, there has been an influx of mobile-based money transfer services, which are effectively driving away business from the banks.
Rather than using the banking system, depositors are increasingly opting for the “less costly” and hassle-free mobile money channel.
Above all, the banks need to restore depositor’s confidence. The depositors are wary of the institutions. Depositors deserve better. – Staff Writer