Punitive bank charges infuriate depositors

CLOUDINE MATOLA

Long-suffering depositors are infuriated by local banks’ exorbitant service charges, which they view as a  bitter pill to swallow, Business Times can report.

Despite the fact that the majority of the country’s industries are teetering on the verge of collapse owing to a weak economy, it appears to be working for the lenders as local financial institutions have thrived.

According to financial results published by the lenders for the six months to June, which were published in the past few weeks, all banks claimed  enormous  profits, which were attained by charging usurious fees to  vulnerable depositors.

For example, First Capital Bank reported a total non-interest income of ZWG297,6m, which includes bank charges and other fees. The net interest income in the six months to June stood at ZWG194m.

Another financial services group, CBZ, reported non-interest income of ZWG1.15bn compared to ZWG596.33m reported on interest on loans.

In a snap survey conducted by Business Times, a market leader in business, financial and economic reportage, this week, there is general consensus among depositors that  they have suffered  as a result of punitive charges.

Now, there is concern that the exorbitant  bank charges may further erode public trust in the financial services industry, which is vital for allocating resources in an economy.

The survey revealed that most lenders are now charging withdrawal fees of about 3%  of the amount being withdrawn , up from 1% charged in April this year.

The monthly maintenance fees were over ZWG20 for businesses and over ZWG6 for individuals.

The Reserve Bank of Zimbabwe governor Dr John Mushayavanhu said the apex bank was engaging the banking sector to ensure affordable and accessible banking services in order to promote financial inclusion.

According to Dr Mushayavanhu, the apex bank want banks to offer fair and affordable bank charges.

“Cognisant of the need for fair and affordable bank charges, the Reserve Bank continues to actively engage banking institutions to ensure affordable and accessible banking services, to promote financial inclusion and as part of market conduct supervision,” Mushayavanhu said.

He added: “Furthermore, banking institutions and deposit-taking microfinance institutions were directed to exempt individual accounts maintaining a daily balance of US$100 or less (or equivalent in local currency), for a period of up to 30 days, from monthly maintenance or service fees.”