The Permanent Secretary of Finance, Economic Development, and Investment Promotion, George Guvamatanga, has appealed to banks in Zimbabwe to reduce charges and fees to attract the unbanked population into the formal banking system. Guvamatanga highlighted the issue of low deposits in savings accounts, with the majority of deposits being transitory. The government has been advocating for lower banking fees to encourage the estimated US$2.5 billion circulating outside formal channels to be deposited in banks.

Speaking during a post-budget briefing last Wednesday, Guvamatanga encouraged the banks to initiate moves that attract people to keep their money in banks. NewsDay quotes him as saying:

Now let me come to an interesting issue of confidence in the banking sector. There is a need for work on government’s part, which we are trying. On the government’s part, what we have realised on the issue of stability, the issue lies in confidence. That is why stability is the overarching issue here.

The issue is on (bank) charges. Banks please. Someone commented that we no longer have banks in this country. When I put money into your account, you pay me later. You make a cash withdrawal, you withdraw $100 000, the bank takes its 2% or 3% commission and sometimes there is no limit. When you walk away from the bank, you walk away with $97 000. So, the question is, are we encouraging the depositors to bank their money?

Guvamatanga also accused banks of focusing on non-core business activities instead of lending. Guvamatanga pointed out that most banks generate around 60% to 70% of their income from non-funded sources, which is significantly higher than the norm internationally.

He specifically criticized the charges imposed on Visa and Mastercard debit cards used for foreign transactions, referring to them as “robbery.” Guvamatanga called for banks to address these issues before the end of the festive season and urged them to revise their charges to encourage people to deposit their money in banks.

In response to the high bank charges, the Bankers Association of Zimbabwe mentioned various costs that banks face, including operational and capital costs from service providers, license fees, software maintenance costs, and currency repatriation costs. The association also noted that while traditional current/demand accounts incur bank charges, there are other products such as savings accounts that do not incur charges.

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