RESERVE Bank of Zimbabwe governor John Mangudya in June slashed bank transaction fees significantly to give a reprieve to depositors who had suffered exortionate charges from banks while at the same time promoting the use of plastic money, but it seems financial institutions have already found ways to go round the central bank directive.
By Taurai Mangudhla
As a result of the current cash crisis, which sparked a run on deposits, banks have been forced to ration cash by capping daily limits to US$100 daily, below the stipulated US$1 000 per day. Even institutions with a liquidity base to pay daily withdrawals of more than US$100 have resorted to the limited withdrawal limits, while maximising on volumes of transactions after the central bank capped maximum withdrawal fees at US$2,50 per transaction.
Some institutions offer as little as US$50 per customer daily, while others go for days without cash. However, banks such as Standard Chartered Bank and Ecobank have been known to give up to US$500 per customer in withdrawals.
These two are an exception at a time some major banks with access to cash are maintaining withdrawal limits as a means to maximise on transaction fees.
A snap survey by businessdigest last Thursday showed Steward Bank (Steward), for instance, was giving customers US$100 per customer at each of its Harare branches.
Although clerical staff at Steward’s banking halls threatened customers who attempted to withdraw from more than a single branch in the same day with unspecified action, businessdigest witnessed scores of the institution’s depositors systematically withdrawing from three different branches — Joina City, Kwame Nkurumah and Eastgate.
This, according to market watchers, is one of the ways in which the bank is making a killing out of desperate customers.
“I believe Steward Bank is able to give customers more than the US$100 per day because its numbers are far less than some of these banks and it has better access to cash. They are simply charging you transaction fees for every withdrawal you make. For example, you make three transactions to withdraw US$300 instead of one and the charges become too much, too high,” said an employee at the bank.
Next to Steward Bank’s Eastgate branch is NMB Bank, which was on the same day giving its customers US$200 without a hustle. Stanbic Bank, which used to give US$1 000 at the beginning of the cash crisis, and later reduced it to US$500, has since last Tuesday started giving US$100 per day to its customers.
Last Friday, Steward staff in Mutare were giving more than US$100 per customer depending on the balance and origin of the deposit with priority being given to salaries.
Businessdigest witnessed customers withdrawing as much as US$400 at the Steward Mutare branch. However, all transactions were subject to a balance enquiry prior to the withdrawal, another way banks maximises on transaction fees.
Steward chief executive Lance Mambondiani said like any other bank or business, Steward is operating under severe cash shortages which it manages on a day to day basis to meet the demands of customers.
The bank, he said, is guided and complies with the cash withdrawal limits stipulated by RBZ from time to time.
“To avert the cash crisis, the bank has been encouraging customers to use its various electronic platforms such as Ecocash Banking Services, internet banking, ATMs and POS machines. The bank currently has more than 10 000 POS machines across all major retailers, the largest in the country, to aid the central bank’s drive towards cashless transactions,” said Mambondiani.
“The bank offers free-banking services to its customers through our hugely popular iSave account with no monthly service fees. Steward Bank was also among the first banks to reduce charges across our electronic channels which included a 50% reduction on RTGS charges, scrapping of POS charges on all transactions below US$5 and free POS transactions to all Zimbabweans every Friday.”
Depositors have been left desperate to withdraw their money due to cash shortages. During the widely successful stay away that put business to a halt last week, queues were seen at CBZ ATMs in Harare as people tried to withdraw their money.
Last Thursday, hundreds of Zimbabweans queued at an FBC Bank branch on the corner of Nelson Mandela and Julius Nyerere to withdraw their US$100.
The RBZ mid-June slashed tariffs for electronic transactions and account administration, bowing to mounting pressure from the banking public which has suffered usurious transaction charges from the country’s financial institutions.
As the cash crisis worsened, banks reduced daily withdrawal limits to US$100 charging about US$5 per transaction. This saw depositors losing as much as US$50 to withdraw US$1 000 compared to the previous charges of US$2,50 and US$5 at automated teller machines and in banking halls respectively.
Mangudya said the central bank had agreed with the Bankers Association of Zimbabwe and payment systems providers to reduce charges on electronic transactions in order to promote and encourage usage of electronic banking services.
Monthly administration or service fees for account holders were reduced to a ceiling of US$5 from as much as US$50 while RTGS fees were capped at a maximum of US$5 per transaction while ATM withdrawal fees were also set at a maximum of US$2,50 per transaction.
ZipIT electronic funds transfer were pegged at between US$0,33 to aUS$2,10 while point-of-sale (POS) transactions on the customer’s own bank were capped at US$0,20 per transaction.
For other POS transactions of up to US$10, a charge of US$0,10 was set while US$0,45 was stipulated for transaction above US$10.
POS issuer charges were removed.