Zim bankers engage RBZ on interest rates

Published: 31 October 2013

Local banks have engaged the Reserve Bank of Zimbabwe amid indications that the current memorandum of agreement putting a cap on bank charges and interest rates may soon be reviewed after banks reported lower than expected margins, a senior banker has said.

Speaking on the sidelines of the Confederation of Zimbabwe Industries Bankers Association of Zimbabwe chairman George Guvamatanga said bankers were expecting the ongoing negotiations with the central bank to adopt a position which ensured growth of the financial services sector.

"We are currently engaging with monetary authorities and that MoU may be reviewed soon. No one knew exactly how everything would pan out when this agreement was made," Guvamatanga said.

In September, most banks - locally-owned and foreign-reported a decrease in interest income dragged by the MOU signed in February amid outcry from the public. Independent estimates showed that banks may this year lose $73 million due to the MOU.

Under the MOU, banks would, with effect from last February, charge up to 0,5% of the cash withdrawal amount subject to a minimum charge of $2,50, while ledger fees, maintenance and service fees will cost up to $4 per account.

The central bank and the bankers also agreed to push for the mandatory use of debit cards. Automated teller machines, according to the MOU, will now attract a withdrawal fee of $2.

Point-of-sale machines now attracted a fee of between 10 cents and 50 cents while no charges shall be levied on cash deposits. The pact also exempted senior citizens above the age of 60 from all bank charges, including maintenance fees except where such accounts were used for conducting business-related activities.

Experts say the new Zanu-PF government should fully re-engage multilateral financial institutions to secure long-term financing as well as lift a cap on bank charges and interest rates.

Zimbabwe's economy has since 2009 been relying on credit lines from the African Development Bank and PTA Bank as the country failed to access funding from multilateral institutions due to debt overhang.
- newsday