THE banking sector is set to lose $40 million annually in revenues due to the reduction in bank charges and other service fees, the Bankers’ Association of Zimbabwe president George Guvamatanga said yesterday.
Report by Tarisai Mandizha
At the end of January, the Reserve Bank of Zimbabwe (RBZ) and banking institutions signed a memorandum of understanding (MoU) that provides guidelines for the determination of interest rate margins and bank charges following a public outcry.
“There is an MoU signed between the government and the banking sector and I can confirm that all banks are complying,” Guvamatanga said while speaking at the World Consumer Rights Day celebrations in Harare.
“The agreement means we will be taking away just over $40 million in terms of income to financial services sector.”
He added that other issues like wages needed to be addressed as they were becoming too expensive, thereby increasing the cost of doing business.
“We are not forced to do this, as we volunteered. But we expect other players to play their part and also that other services – not only bank – charges will be looked at,” Guvamatanga said.
Early this month Finance minister Tendai Biti threatened to introduce a new law to force banks to comply with the new interest rate regime – lowering the cost of borrowing.
The MoU, according to the RBZ, took effect on February 1 after 75 days of negotiations.
Banks are now required to pay an interest of 4% for time deposits of $1 000 and above held over a period of at least 30 days.
The MoU also requires that lending rates at banks be subject to a maximum rate of more than 12,5% above each respective bank’s weighted average cost of funds.
Under this arrangement, banks are required to 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 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 10c and 50c, while no charges shall be levied on cash deposits.