Published: 2 hours ago

Zimbabwe's banks are facing criticism from both depositors and the Reserve Bank of Zimbabwe (RBZ) over the imposition of high fees and charges, which are increasingly seen as exploitative.

RBZ Deputy Governor Dr Innocent Matshe, speaking at the Life Offices Association breakfast meeting in Harare, expressed strong concern over the sector's reliance on fee-based income. "Financial institutions should not be making most of their money from fees. They are getting more than 30% of their income from fees and charges," he said.

Dr Matshe warned that banks' focus on non-funded income, rather than traditional lending and interest generation, undermines public confidence. "Banks are the biggest problem as far as confidence is concerned because they are all focusing on this non-funded income instead of the core business that you lend and get interest," he added.

Depositors, already grappling with a fragile economy, have described the charges as "a bitter pill to swallow." Permanent Secretary in the Ministry of Finance, George Guvamatanga, noted that banks are effectively "collecting rent from customers" on a monthly basis, citing fees of US$20 - 25 for maintaining accounts and additional commissions on withdrawals and card transactions.

The government's concern is that punitive fees may discourage people from depositing money, weakening the financial system and hindering economic recovery. Guvamatanga urged banks to reform, emphasizing that charges should incentivize, not penalize, depositors.

With banks' profits increasingly dependent on fees rather than lending, and public trust at risk, Zimbabwe's financial sector faces mounting pressure to overhaul its practices to safeguard depositors and support economic growth.
- Business Times

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