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Daggers out for foreign banks

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DAGGERS are out for foreign banks for not participating in government efforts to raise funds through the issuance of treasury bills by the Reserve Bank of Zimbabwe.

Report by Nqobile Bhebhe

A treasury bill (TB) is a short-term debt obligation backed by the government with a maturity period of less than one year.

TBs are issued through a competitive bidding process. Two attempts by the central bank to raise $15 million have so far hit a brick wall.

Finance minister Tendai Biti last week took a swipe at some banks accusing them of giving government headache. He cited Barclays Bank, Stanbic Bank and Standard Chartered as the main culprits.

Biti said the banks had stayed away from participating in the TBs floated recently. “These banks, Barclays Bank, Stanbic Bank and Standard Chartered have attitude problems which I won’t say much of, but we will also act on that,” Biti said.

“Treasury Bills are the most secure form of liquidity . . . but they did not participate.” Treasury Bills were last floated in 2008. Meanwhile, Biti said government will soon make an announcement on interests rates and bank charges as the current regime was very punitive and discouraged a saving culture.

The banking public has in recent months complained over interest rates and service charges as some banks have been quoting interest rates of up to 50% per annum.

Appeals have been made to government to introduce a policy to discourage exorbitant interests rates by banks. Biti said depositors earn virtually no interest on their deposits, which, instead of increasing were actually whittled down by charges.

“As a country, foreign direct investment alone is not enough we need to revive the culture of saving locally. But how do people save in an environment that does not permit?” Biti queried. “Interests rates are too high.

Banks should stop their unethical practices. As regulators, we are taking measures and in the next few weeks, a pronouncement on high interests rates and bank charges will be made. What is happening is voodoo banking and our bankers have been watching too many Nigerian movies.”

On credit lines, the minister, said Treasury has engaged South Africa with the view of restoring R2,75 billion lines of credit that used to exist between Pretoria and Harare, and positive feedback was expected.

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