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Oliver Kazunga Senior Business Reporter
THE banking sector has finally agreed to reduce charges for its services in a milestone move that economists say will invigorate the economy and improve operations of the sector. The Reserve Bank of Zimbabwe (RBZ) stressed in its 2012 monetary policy statement the need for banks to review downward their charges.
Bankers’ Association of Zimbabwe (BAZ) president Sam Malaba was quoted by ZBC on Wednesday as saying reducing charges was in line with the central bank directive aimed at increasing savings and restoring depositors’ confidence.
He said while financial institutions have agreed to slash the charges, each bank would be adjusting its rates downwards depending on costs to revenue structures.
Some local banks are already providing low cost bank accounts to the banking public and there is a need to widen such initiatives to promote financial inclusion.
The RBZ and BAZ had resolved that institutions without low cost accounts should at least provide the banking public with basic banking services at low cost.
Economic commentators have welcomed the move.
“It’s good for the clients that banks have reduced their charges. RBZ is saying the charges are a bit steep compared to regional banks. In the long run, the reduction of bank charges will go a long way in encouraging the public to save their money using banks,” said Vandudzai Zirebwa.
“Why would I put my money into the bank if my balance continues to decrease as is the case with some banks?”
Most depositors have lost confidence in the local banking sector due to a spate of bank failures and high interest rates. A number of banks have closed due to difficulties in the economy.
Another economist with a leading financial institution who preferred not to be named said reducing bank charges was a slow building step towards restoring banking sector confidence.
“By reducing the bank charges it’s good for everybody. Banks should come up with a product that taps into the lower end of the market (informal sector), which will see the survival of the banking sector in the long-term. More so, if these people (informal sector) are tapped into, they’ll be able to keep money in their accounts,” said the analyst.
Sheila Sidambe said the reduction of bank charges was a positive development as it would not only benefit depositors but the banking institutions as well.
The latest Finscope study indicates that at least $4 billion is estimated to be circulating outside the formal banking sector.
Online Reporter