THE Reserve Bank of Zimbabwe and the Bankers’ Association of Zimbabwe have signed a memorandum of agreement to lower bank charges with immediate effect as the central bank vowed to shield banking institutions from the indigenisation and empowerment policy.
Report by Bernard Mpofu
Presenting his first Monetary Policy Statement for the year, central bank governor Gideon Gono yesterday said local bankers and the monetary authority had inked a pact to reduce bank charges amid concerns that the service charges were discouraging savings in the formal banking system.
“It is heartening to note that after 75 days of negotiations, the Reserve Bank and the banking sector came up with an agreed framework which will see substantial reduction in bank charges. The agreed memorandum of understanding was signed this afternoon (yesterday),” said Gono.
Under this arrangement, banks will with effect from today charge up to 0,5% of cash withdrawal amount subject to minimum charge of $2,50 while ledger fees, maintenance and service fees will cost up to $4 per account.
The central bank and the bankers also agreed to push for the mandatory use of debit cards. Automated teller machines, according to the MOU will now attract a withdrawal fee of $2.
Point-of-sale machines will now attract a fee of between US10 cents and US50 cents while no charges shall be levied on cash deposits. Gono also announced a reprieve for senior citizens above the age of 60 which will exempt them from all bank charges, including maintenance fees except where such accounts are used for conducting business-related activities.
Meanwhile, in a veiled attack on Indigenisation and Empowerment minister Saviour Kasukuwere who is pushing for the acquisition of foreign-owned banks under the policy, Gono vowed to protect the fragile banking sector, saying a blanket approach to the policy would destabilise the economy.
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The empowerment law compels foreign-owned companies operating in Zimbabwe to sell 51% equity to locals.
“All banks are urged to observe the laws of the country including the Indigenisation and Economic Empowerment laws,” said Gono.
“A one-size-fits all approach does not work. We have also advised everyone that apart from the Constitution of Zimbabwe, there is no other piece of legislation that is superior to another.
Therefore, until such time that there has been a harmonisation of the laws, which has repealed certain sections of the Banking Act which requires us to do certain things, any pronouncement that encroaches on the financial services sector—(however allowed), will remain pronouncements until members know where to go and we will consult . . .
“When I met the Indigenisation minister earlier on this morning, I said to him there is no bull in a China shop when it comes to those matters and therefore frequent and flagrant attacks on banks by some who may not be as knowledgeable as we are is not something that we will continue to keep quiet on and watch putting our hands at akimbo.”
Turning to compliance of banks to the revised minimum capital requirements announced last year, the central bank chief said 67% of banks had partially complied with the capital levels. He said the central bank was currently examining compliance plans for other non-compliant institutions.
Among some of the banks that failed to raise $25 million by December 31 2012 are State-owned Agribank, FBC Building Society, ZB Building Society, ZABG and Capital Bank (formerly ReNaissance Merchant Bank).
He, however, said the banks had shown “significant progress” towards raising the prescribed capital. Gono said ZABG had approached the National Indigenisation and Economic Empowerment Board seeking nearly $40 million to shore up the bank.
The central bank chief also warned bank executives against pronouncing their capital levels without approval from the central bank.
“Forthwith, banking institutions should cease making unilateral self-exultations in the media as regards compliance with prudential requirements, including minimum capital without seeking prior Reserve Bank approval. Any such unsanctioned declaration will attract appropriate regulatory action. We cannot have people waking up and saying we have complied,” said Gono.