THE Reserve Bank of Zimbabwe (RBZ) has expressed grave concern over soaring bank charges fuelled by worsening cash shortages in the domestic market.
By Bernard Mpofu
Local financial institutions have increased service charges by up to 570%, taking advantage of the prevailing cash shortages.
Depositors now rely on multiple electronic transactions such as point-of-sale and Automated Teller Machines (ATMs) transactions to withdraw their hard-earned cash locked in banks.
However, RBZ governor John Mangudya told the Zimbabwe Independent this week that the apex bank was “deeply concerned” with rising extortionate bank charges.
“That is not RBZ’s policy. RBZ policy is that banks should serve their customers diligently. The bank is deeply concerned about high bank charges which are counterproductive to financial inclusion and to the use of plastic money that we are currently promoting. The measures that we have started are bearing fruit,” Mangudya said.
He, however, did not say what the central bank would do to address the situation.
Most banks were charging withdrawal fees of about US$3 inside brick-and-mortar banking halls and US$2,50 for withdrawals done on ATMs for cash of up to US$1 000.
Cash shortages besetting the economy have now resulted in a depositor being levied US$20 for a withdrawal of US$1 000 made over several days due to an average daily limit of US$200. This then implies a hike of between US$17 and US$17,50 or nearly 570%.
Some banks are charging slightly less, but overall, all have increased their withdrawal charges by huge margins.
International payment charges have also increased the high cost of settling international card transactions. For instance, the cash withdrawal fee for international debit cards has gone up from 3% to 5% per transaction, with a minimum charge of US$3,50 per transaction for those using Mastercards.
Last year, banks announced an astronomical rise of up to 300% in ATM service charges for withdrawals under national electronic funds switch, ZimSwitch.
This came after the financial institutions agreed on an upward review of the fees to maintain ATM infrastructure, in a move analysts say could boost non-interest income for the sector, while hurting bank customers.
This move discouraged depositors from using the switching system despite boosting banks’ non-interest income. Non-interest income refers to bank’s revenue mainly from service and penalty charges and to a much lesser extent, asset sales and property leasing.