Bank charges hike justifiable: Baz

HARARE - Zimbabwean financial institutions insist that the recent hike in bank charges is justifiable to meet their operating costs.

This comes as banks recently increased levies by at least 50 percent — following expiry of an agreement with the central bank barring them to — resulting in depositor outcry.

George Guvamatanga, the Bankers Association of Zimbabwe (Baz) president, told Parliament on Friday that there was a general lack of understanding of banks’ functions and fees or costs they face in doing business.

“The money that we are using in the country is not ours and we have to pay to bring the United States dollars into Zimbabwe. We pay the planes that carry the money, the security that accompanies the money as well as insurance fees,” he said, adding “banks will be paying money all the way until the cash reaches banks in every part of the country”.

Guvamatanga noted that it was only fair for financial institutions to charge some premiums to help them recover some of the monies they would have used to secure the currencies.

“The question we should be asking is how much should be charged, but we can’t completely do away with bank charges,” he said.

A snap survey conducted by businessdaily revealed that since January this year bank charges have risen from around $2,50 to about $5.

Last year, banks signed a Memorandum of Understanding (MoU) with the Reserve Bank of Zimbabwe (RBZ) effectively pegging lending rates at 12,5 percent, while cash withdrawal fees were set at a maximum of five percent with a minimum of $2,50 and ledger fees, maintenance and service fees of $4 per account.

During the tenure of the MoU — which ended in November 2013 — banks through the Bankers Association of Zimbabwe (Baz), warned the industry stood to collectively lose $73 million in potential income as a result of the agreement.

Charity Dhliwayo, the acting RBZ governor recently urged financial institutions to upgrade their core banking systems and delivery systems to promote efficiency which would assist in reducing the cost of service delivery which translates to lower charges for the banking public.

“Empirical evidence indicates that banks’ strong reliance on charges to cover operational expenses is a reflection of inefficiencies in service delivery,” Dhliwayo said.

In an effort to promote financial inclusion, the central bank has advised banks to seek approval by justifying any intended increase in their interest and bank charges rates.

Guvamatanga said bankers have not done enough to educate the nation on the operation of different types of bank accounts.

“As bankers we have embarked on programmes aimed at teaching Zimbabweans financial literacy as a way of ensuring that the public have an appreciation of the financial services sector.

“At the moment we have transactional or demand accounts and these attract charges because of their nature.

“However, savings or deposit accounts do not attract any transactional charges,” he said.

The Baz president said bank and transactional charges can only come down if government put in place a legislative framework that allows inter-operationability and remove monopolistic and restrictive tendencies in the mobile banking sector.


Comments (1)

These bankers are just greedy and selfish people.Just a bunch of plunders. How many banks have closed down how many of us have ever gotten our money from these banks.ZERO

Roland Dube - 17 March 2014

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