Govt moves to dismantle ‘hidden costs’ in banking industry

LIVINGSTONE MARUFU

Long-suffering depositors may finally be on the cusp of long-awaited relief after Cabinet moved to slash the cost of licences, permits and fees across the financial services sector, a decisive intervention authorities say is aimed at dismantling “hidden costs,” restoring confidence in formal banking channels, and unlocking critical liquidity for the productive economy.

In a decision with far-reaching implications for banks, microfinance institutions and the broader financial ecosystem, government signalled its intent to rein in excessive charges that have long discouraged low-value transactions and kept millions outside the formal financial system.

At the centre of the reforms is a targeted reduction and in some cases elimination of bank fees, including monthly charges on low-balance accounts, transaction costs on small-value payments, and deposit-related levies that have historically penalised cash mobilisation.

Information, Publicity and Broadcasting Services Minister Dr Zhemu Soda said the Cabinet-backed review would streamline overlapping regulatory requirements while cutting unjustifiably high charges imposed across the sector.

“Cabinet approved the streamlining of duplicated and overlapping regulatory licences and permits, removed unnecessary levies and fees and lowered unjustifiably high levies and fees,” Dr Soda said.

The measures include the scrapping or reduction of monthly account maintenance fees for balances below US$100, lowering charges on transactions under US$5, removing cash deposit fees for both US dollar and ZiG accounts, and capping cash withdrawal fees at 2%. Account opening fees are also set to be reviewed downward.

The policy thrust represents more than a consumer relief package—it is a calculated attempt to deepen financial intermediation in an economy where trust deficits and high transaction costs have historically driven cash hoarding and informal market activity.

By reducing friction in the banking system, authorities are betting on a return of deposits into formal channels, potentially expanding the pool of lendable funds available for industry, infrastructure and small business financing.

Economists say the success of the reforms will hinge on execution discipline and regulatory coherence.

“Lowering entry and transaction costs is critical in an economy like Zimbabwe, where informalisation has been entrenched by high charges and policy unpredictability,” a Harare-based financial analyst said. “If implemented consistently, this could materially improve deposit mobilisation and credit creation.”

The reforms extend beyond commercial banks to encompass microfinance institutions, insurance firms, pension funds, mobile money operators and fintech platforms—signalling a system-wide recalibration of the cost structure within Zimbabwe’s financial architecture.

The review forms part of a broader government push to reduce the cost of doing business by up to 50%, a target that authorities argue is essential to restoring competitiveness and attracting both domestic and foreign investment.

President Emmerson Mnangagwa has directed that the rationalisation of licences and levies be expedited through Statutory Instruments, although the process has already missed its initial first-quarter 2026 deadline.

Beyond financial services, Cabinet has widened the reform net to include key productive sectors such as manufacturing, agriculture, tourism and telecommunications, industries long burdened by fragmented regulatory regimes and overlapping fees.

In manufacturing, the review spans ten sub-sectors, including beverages, agro-processing, textiles, pharmaceuticals, motor vehicle assembly and iron and steel production.

Among the headline changes are the removal of rural district council timber movement permits, consolidation of Environmental Management Agency (EMA) registration and monitoring licences, and reductions in import licence fees and specialised regulatory charges, including those imposed by radiation authorities.

The health sector is also undergoing a parallel clean-up, with Cabinet approving the removal and reduction of multiple licensing and inspection fees affecting pharmaceutical wholesalers, retail pharmacies and healthcare institutions.

These include scrapping initial registration fees for wholesalers and pharmaceutical premises, reducing annual inspection costs, and lowering charges for regulatory approvals such as clinical trials, hospital tier classifications and certification processes.

Authorities say the cumulative effect of these reforms will be to eliminate inefficiencies, reduce compliance costs and improve service delivery across sectors.

However, the full impact will only become clear once a comprehensive schedule of revised fees and licences is gazetted an exercise officials say is now underway.