The Reserve Bank of Zimbabwe has made an about-turn on the issue of bank charges, giving banks the green-light to review their charges, effectively revoking a memorandum of understanding (MoU) with banks signed early this year where banks were ordered to lower service charges, NewsDay has learnt.
Bernard Mpofu,Acting Business Editor
According to a letter to the Bankers’ Association of Zimbabwe (BAZ) president George Guvamatanga on Wednesday, central bank governor Gideon Gono said with effect from December 1 2013, the banks would now have autonomy to peg bank charges.
The central bank chief, however, warned the financial institutions against charging high service fees.
Gono’s term of office as Reserve Bank governor expires tomorrow, after sitting at the helm of the central bank for 10 years.
The development, which could be a departure from the policy intervention by Gono before his final term of office expires, comes at a time banks have appealed to the central bank to review the pact amid concerns that the sector’s non-funded income had declined after the January 31 MoU.
The agreement framework which resulted in banks loweringservice charges following a public outcry, according to Gono, took 75 days to negotiate.
The MoU among other things cushioned senior citizens above the age of 60 years from all bank charges, including maintenance fees, except where such accounts were used for conducting business-related activities.
BAZ had also warned that the sector could lose nearly $73 million between March and December this year due to the lowering of bank charges.
“Following a review of the operating environment, the broader circumstances in the economy as well as representations from BAZ members, we hereby advise that the Reserve Bank will not seek to renew the MoU,” Gono said.
“In this respect, with effect from December 1 2013, the MoU will no longer be applicable. Meanwhile, banks are urged to desist from unwaranted increases in bank charges and interest rates which have adverse impact on the real economy. Banks are, therefore, advised to continue offering affordable banking services to the public in order to spur financial inclusion initiatives already in place.”
The central bank, Gono added, would continue to assess business conditions being offered by banks as well as performance of the sector with a view to promote a safe and stable banking sector.