Banks insensitive to clients
By Vincent Kahiya
‘KINDLY note the RTGS system has been down since Friday. The RBZ advises that the vendors are working to rectify the problem. As a result of that down time, payments could n
ot be processed. I will advise as soon as the system is up. Kindly bear with us.”
Those privileged to have access to the Internet started to receive messages such as the one above from banks on Monday and Tuesday.
The messages sought to shed light on why salaries had failed to reflect in people’s accounts and why accounts remained unfunded despite monies having been transferred through the now misnamed Real Time Gross Settlement (RTGS) system.
Monies transferred as far back as Monday last week were still not showing in accounts of recipients despite remitters having been debited.
The e-messages from banks were a tacit admission by the banking sector that there was a problem.
Meanwhile those without Internet access thronged banking halls only to be told that monies had not been transferred into their accounts.
They were told of a gridlock in the RTGS system. They were told that it was the RBZ which had suspended the RTGS system “because it had no money”.
The other well-recited excuse was that the power outage on Tuesday had thrown the RTGS system into a tailspin.
One question banking staff at enquiries desk failed to answer though was when this would be fixed and when accounts would be funded.
The desperate depositors included those afflicted with chronic illnesses having to endure extended periods of pain because they could not access money sent through the RTGS system by relatives to purchase life-sustaining drugs.
At one bank branch I visited in the city centre a frail man left the bank in tears after he was told there was no money in his account. He had in hand a Barclays Bank RTGS form as proof that money had been transferred into his account. To illustrate his desperation, he pulled out a bottle of Stalanev tablets and placed it in front of the bewildered clerk who scarcely got the message that the man was on ARVs.
He was not the only victim. The list included thousands of workers who failed to access their salaries on time this week and pensioners who failed to access their miserly incomes.
Individuals and companies had unpaid invoices to hand as their accounts remained empty despite monies having been transferred into them this week.
Many failed to purchase goods and services whose prices went up exponentially in sync with the weakening local currency. Fuel for example has gone up more than four times in the last 10 days.
Deals worth trillions of dollars were not sealed as punters failed to move funds to stockbrokers to pay/buy shares on the bourse. Activity on the money market was also badly affected.
Money locked in the system has been losing value daily and there is no recourse to the depositor who is still expected to pay bank charges, taxes and at the end of the day earns nothing in interest from the money deposited with banks.
Wholesalers and manufacturers registered reduced business this week as retailers — who pay for orders through the RTGS system — failed to pay for purchases.
The quantum of business lost countrywide would be difficult to fathom but evidence of its extent was abounding in dejected faces of depositors at banks and desperate parallel market dealers working feverishly on their cellular phones to calculate lost opportunities and positions.
In this desperate situation, there was no coherent statement from banks and the central bank, which bred speculation and disinformation.
But this paper’s investigations revealed that the major reason there was no movement of funds between banks since the latter half of last week was that banks’ accounts at the central bank were not adequately funded.
The banking public was never told this line. By last Wednesday, 999 transactions between banks, valued at $34 trillion, had been dishonoured.
The dishonoured transactions were concentrated at Standard Chartered Bank with $14,6 trillion, ZB Bank with $5,8 trillion and Beverly Building Society at $4 trillion, according to RBZ figures.
We revealed the banks’ short positions last week in a series of stories and in our Comment.
We stirred a hornets’ nest. The news editor Dumisani Muleya and myself were bombarded with angry phone calls and text messages from bankers.
Banks were very quick off the blocks, accusing us of lying, misrepresentation and ignorance of the functioning of banks.
I dared the banks to write to us or grant us interviews concerning their liquidity positions.
I also challenged them to come up with statements to inform their clients that our story was way off the mark and that the financial institutions were healthy and operating normally. Their universal response to this was “Gono munomuziva — he is vindictive. He will close us down tomorrow.”
“So you won’t defend your position even if it is correct because you are afraid of Gono?” I asked one of them. “Perfectly so if that will save the bank,” he responded.
But this silence on key policy issues and fundamental aspects for mere survival will not endear banks to their clients.
Depositors are the least interested in this gobbledygook about scary-Gideon. It is incumbent on banks to tell depositors exactly what is happening.
Some of the troubled banks are quoted on the stock exchange. In this circumstance, were the banks not expected to issue cautionary statements to explain their liquidity positions? Perhaps that is not as important as the need to build confidence in the banking sector. At the moment it has plumbed to embarrassing lows and does not appear to have hit the bottom yet.