Banks must reform
“We don’t know where they are getting their shame from.”
Those were the searing words of Reserve Bank of Zimbabwe (RBZ) Deputy Governor Dr Innocent Matshe, as he tore into the country’s banks for imposing sky-high fees that have become a daily nightmare for depositors.
His stinging rebuke was not mere rhetoric; it was a pointed reminder that Zimbabwe’s banking sector is veering dangerously off course, extracting rents from the public instead of fulfilling its primary mandate of lending and supporting economic growth.
For years, long-suffering Zimbabweans have endured a financial system that feels more predatory than service-oriented. Banks—supposed custodians of savings and engines of credit—have increasingly turned into toll collectors. Instead of making money from core business activities such as lending, they now derive over 30% of their income from fees and charges.
This reliance on non-funded income is not just lazy banking—it is corrosive to confidence, unfair to customers, and unsustainable in the long term.
Dr Matshe’s frustration was palpable: “Banks are the biggest problem as far as confidence is concerned because they are all focusing on this non-funded income instead of the core business that you lend and get interest.” In other words, the very institutions meant to oil the wheels of commerce are now choking them with punitive fees.
Ordinary depositors know this story all too well. Bank statements now read like endless chains of deductions: “maintenance fees,” “service charges,” “commission on deposit,” “cash withdrawal levy.” Many customers describe the experience as daylight robbery.
Permanent Secretary in the Ministry of Finance, George Guvamatanga, captured it bluntly: “Banks are collecting rent from customers on a monthly basis. They now say, you have an account where you pay me a rental of US$25 every month or US$20 every month.”
That is not banking. That is extortion disguised as financial service provision. Imagine the absurdity: you deposit your own hard-earned cash into a bank—an act that should strengthen the institution and earn you modest interest—but instead you are punished with a commission for depositing. Then, when you attempt to access your own funds, another hefty charge awaits. To call this a “bitter pill to swallow” would be an understatement; it is financial cannibalism.
What makes the situation even more galling is the dissonance between the country’s economic reality and the banks’ glowing profit statements. Zimbabwe’s economy is fragile, with industries struggling, households squeezed by inflation, and unemployment biting deep. Yet banks, cushioned by their fee-collecting machinery, continue to post eye-watering profits.
The contrast is obscene: while businesses collapse and families scrape by, banks are thriving—not because they are innovating, lending, or driving growth, but because they are milking customers dry. Such practices are not just morally questionable; they are economically reckless.
When banks make it punitive to hold money within the formal system, depositors inevitably retreat to the informal economy. Mattress banking, cash hoarding, and shadow transactions flourish—further weakening the financial system. Once trust evaporates, rebuilding it becomes near impossible.
The essence of banking is trust. Customers deposit their money because they trust banks to safeguard it, grow it modestly, and allow convenient access when needed. Once that trust is eroded, the entire edifice of the financial system trembles.
Already, there are signs of deepening public disillusionment. Many Zimbabweans, scarred by previous episodes of bank failures and currency collapses, are wary of formal institutions. Punitive fees only confirm their worst suspicions: that banks are not allies but adversaries.
This erosion of trust carries systemic risks. If citizens shun banks, savings dry up, lending capacity shrinks, and the economy stagnates. A fragile recovery—already hobbled by debt arrears, limited investment inflows, and exchange rate volatility—could collapse under the weight of a financial system people no longer believe in.
That is why the calls from policymakers must be treated with urgency. Guvamatanga put it clearly: “Charges should encourage people to put their money into the bank.” Instead, banks are doing the opposite. They are punishing depositors, deterring savings, and undermining the very foundation of financial intermediation.
Reform is not optional—it is imperative. Banks must realign with their true purpose: mobilising savings and channeling them into productive lending. They must innovate to create value, not strip it from customers. They must see depositors as partners, not prey.
This is also a governance issue. Regulators must set clearer guidelines to rein in exploitative charges, ensuring that fees reflect the cost of service provision, not the desperation of customers. At the same time, government must balance oversight with policies that promote credit growth, encourage investment, and restore confidence in formal banking.
Zimbabwe’s banking sector stands at a crossroads. It can either continue down the path of rent-seeking and short-term profiteering, or it can reform, rebuild trust, and reclaim its role as a driver of development.
Dr Matshe’s question still hangs in the air: “We don’t know where they are getting their shame from.” It is a question that should haunt every banker in Zimbabwe. For in the end, banking without integrity, without service, without fairness, is not banking at all—it is exploitation wearing a suit.
Banks must reform, before confidence collapses, before savings flee, and before the fragile economy takes another devastating blow.
