Published: 10 June 2013

THE Manicaland Business Community has expressed mixed feelings over the recently announced Reserve Bank of Zimbabwe policy of a substantial reduction and scrapping of bank charges on short-term deposits.

While some described the directive as a milestone which was long overdue since banks were "milking the general populace", others believed the move will destabilise the banking sector, with smaller banks expected to struggle.

The Minister of Finance, Mr Tendai Biti, said no bank charges should be levied on deposits up to a maximum of $800.

He also stipulated that any deposit of $1 000 held over a period of at least 30 days and above should attract an interest of at least four percent per annum.

In his monetary policy statement recently, Dr Gideon Gono, also said the exorbitant bank charges were way out of line with international banking practices.

Over 25 banks and the Reserve Bank of Zimbabwe signed a Memorandum of Understanding in a development that will benefit almost 99 percent of the middle class in Zimbabwe.

Confederation of Zimbabwe Industries national council member and Tanganda (Pvt) Ltd financial director, Mr Henry Nemaire, said the directive to scrap bank charges on deposits which are below $800 was a positive development which was long overdue.

He said the policy would, however, benefit small depositors.

"The reduction is welcome, although it will mainly benefit low income customers who earn an average of between $300 and $500, who are seemingly the bulk of the workforce in Zimbabwe.

"Many will benefit from the move since they will be more disposable income in the hands of the middle class. The corporate sector is therefore yet to see the impact. Personally, I believe it was long over due and we, the business fraternity embrace the policy.
"However, I hope that it is not one of those gimmicks like the price controls. If the two parties agreed mutually, then we are fully behind the initiative," said Mr Nemaire.

Individuals had to part with their hard-earned cash of over $8 in bank charges for the so-called account maintenance fees and other charges.

Economic analyst, Mr Kipson Gundani, said the development was welcome since almost 70 percent of the public will be accessing bank charges for free. He, however, said the move had a negative impact on the smaller banks.

"The directive is a major blow to a bank in small towns and places where most - if not all people - deposit not more than $300. Small banks are surely to suffer.

“Bear in mind that banks also have administrative and operational costs, employees need to be paid. A bank, just like any other business needs to survive. This will compromise the viability of banks to a greater extent.
'Smaller banks will be forced to close in a bid to protect the consumer.

“This is shooting ourselves in the foot. Banks will be incurring costs that need to be covered but from where? since 99 percent of bank services will be free.

"I believe the minister (of Finance) should have made it minimal not to totally scratch it like that," said Mr Gundani.

A banker who requested anonymity blasted the initiative and described it as "unreasonable".

"Common sense should prevail at the end of the day. Banks will collapse and as a result, Small and Medium Enterprises will be greatly disadvantaged.

“A bank in Chisumbanje will surely collapse, literally, because small-scale sugarcane growers keep an account balance of not more than $500, how exactly will we want the bank to continue running?

“Most banks survive because of our money. Our economy is not ticking. If it was, we were going to get extra cash by merely leaving our money in our accounts. Will indigenous banks survive? I wonder," he said.
- MP

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