ZIMBABWEâ€™S bank deposits more than doubled in four months buoyed by increased volumes of wired money as the government grapples to restore confidence in the banking sector.
According to information to hand, deposits rose to US$800 million from US$350 million recorded in April after the completion of the four national payment systems â€” cash; point of sale; real time gross settlement system (RTGS) and the recently introduced foreign currency cheques.
â€œDeposits doubled within four months from US$350 million in April to over US$800 million in mid-August owing to an increase in transactions going through the RTGS,â€ banking officials said.
â€œCumulative RTGS transactions are now more than US$2 billion from US$100 000 recorded in Aprilâ€.
With lending rates of up to 10% and investment rates for the money market ranging between 6% and 8%, the new deposit figures are in contrast to previous years when depositors resented the troubled banking sector due to runaway inflation and Reserve Bank raids on private accounts.
This comes amid an increase on volumes trading on the Zimbabwe Stock Exchange which have surpassed US$170 million with the highest monthly turnover realised in June.
Sources predicted that capacity utilisation of banks could have jumped to 50% from an average of 20% at the beginning of the year. However sceptics argue that confidence in the sector could again diminish in the second half of the year after Reserve Bank governor Gideon Gono announced plans to re-introduce the less significant Zimbabwe dollar.
Following the introduction of the multi-currency system, the central bank introduced a phased plan which requires banking institutions to meet 50% of the prescribed assets byÂ September 30 2009 and the full capital requirement of US$12,5 million by next March. Â
Presenting his mid-term Monetary Policy Statement last month, Gono said â€œconfidenceâ€ in the sector could only be improved through more lending despite an increase in deposits.
â€œAs monetary authorities, we are greatly concerned with extreme instances of disintermediation of some banking institutions,â€ Gono said.