HomeBusiness DigestBanks struggle to meet new wages

Banks struggle to meet new wages

Shakeman Mugari

MOST indigenous banks are battling to raise funds to meet new wage bills which have shot up due to recent salary increments awarded to all workers in the banking sector.

The Zimbabwe Bank and Allied Worker’s Union (Zibawu) last week successfully negotiated for a 275% salary increament for all bank workers.

The increments will be paid in two phases.

The first 220% hike is backdated to July, while the remaining 55% would be with effect from October this year.

Zibawu president George Kawenda confirmed that the sector had agreed on a salary increment.

He however said there were fears that some banks in dire straits could fail to pay the new salaries.

At a meeting held last week, some banks told the union that they could fail to pay the new salaries.

“Some banks have said that they might not be able to pay the new salaries because of the current problems in the market. The union has told them to come back and seek exemptions,” said Kawenda.

The banks are said to have also complained about the current liquidity crunch in the market, which they said was still a major threat to their business.

Representatives from Royal Bank, Century, Trust and Finhold are understood to have indicated that they could face difficulties meeting the new requirements.

Trust referred to the central bank its inflated debt, which it said had put severe pressure on its balance sheet and triggered serious cashflow problems.

Royal Bank is said to have indicated that it was still battling to solve its liquidity crunch.

Most traditional banks, however, readily agreed to pay the new increments.

The salary hikes in the banking sector were triggered by the central bank which two months ago awarded a 300% salary increment to its workers.

The increment, backdated to January this year, is said to have caused problems at the negotiating meeting, with workers demanding that their salaries be matched to those of the central bank.

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