There has always been concern over high bank charges in Zimbabwe since the inception of dollarisation in 2009 and the voices have been growing louder since the start of the current bank notes crisis.
As reported in yesterday’s edition of The Herald Business, banks admitted that their charges were punitive on depositors as they do not send the right signals at a time everyone is working to promote the use of plastic money.
Barclays Bank of Zimbabwe managing director George Guvamatanga said some of the charges being levied by banks were not consistent with the financial inclusion rallying call.
Mr Guvamatanga recently called for a realignment of pricing structures in line with economic developments locally and internationally. We cannot agree more and wonder why banks are not practicing what they preach. Time and time again we have mentioned that our banking sector is not pulling in the same direction with Government and everyone else and is not responsive to depositors’ needs.
To an extent bank charges have only served to discourage the use of the formal banking system when banks are supposed to serve as the medium for financial trade.
For instance, the average charge on Real Time Gross Settlement transactions is $10 while withdrawal fees are on average at $3 inside brick-and-mortar banking halls and $2-$2,50 for withdrawals done on ATMs. ZIPIT/ POS fees are as high as $10 for a $500 transaction.
This is over and above accounts maintenance fees of about $12 per month.
In other words, if an account holder makes a $500 ZIPIT transaction, one inside brick-and-mortar banking hall, one ATM withdrawal and an RTGS in one month, he/she stands to lose $27,50 — being $12 account handling fee, $10 ZIPIT fee, $3 inside brick-and-mortar withdrawal and $2,50 for the ATM withdrawal. This is equivalent to about eight 2-litre bottles of cooking oil! This is usury and must be stopped.
While Government is working on improving the doing business environment, including a critical look at cost of enablers with a view to bringing them down, the banking sector has remained stuck in the hyperinflation-mode, charging costs that are exorbitant.
They must change.
We are worried though that despite the admission by the banks, we have not seen any movement. Banks are still charging the same high fees for what they call “service”.
Is this a case of blindfolding the country into thinking that there is some action when in actual fact there is not? We have always mentioned that it is costly to keep your money in the bank because of the high costs.
The RBZ has made numerous calls for the banks to adjust their cost structures, but all this has fallen on deaf ears.
How then do you encourage Zimbabweans to keep their hard earned cash in the banking system when the banks are ripping them off in broad daylight?
In other words we can conclude that the banking sector is guilty of pushing away millions of depositors out of the banking sector and in the process pushing billions of dollars into the informal market system.
The recent directive by the RBZ to retailers and banks to introduce plastic money is noble. But this can only succeed in the event that there has been a downward review of bank charges which have proven to be too high.
As long as the charges remain high, Zimbabweans will continue to shun the system.
This is one of the reasons why banks have been finding it difficult to penetrate the informal sector. We welcome the conversation planned by bankers towards reduction of electronic transaction charges. Yes, we take their words with a warm heart, but what remains is the implementation of their promises.