The move by outgoing Reserve Bank of Zimbabwe governor Gideon Gono to revoke a memorandum of understanding (MoU) with banks signed early this year that resulted in banks agreeing to lower service charges could leave the banking public at the mercy of banks.
In fact, the about-turn on the issue of bank charges giving banks the green-light to review their charges on their own is bad for the economy where the confidence the public had in the country’s banking system could be eroded.
We wonder what informed Gono’s decision. While he could have good intentions, it could be viewed as sabotage by some sections of society given the timing in light of the expiry of his term of office. We are aware that the Bankers’ Association of Zimbabwe (BAZ) was critical of Gono’s move when he ordered them to sign the MOU against their will.
At the time, BAZ warned that the sector could lose nearly $73 million between March and December this year due to the lowering of bank charges. So, could this be Gono’s way of repaying them now that his term is expiring today? While Gono has the prerogative to decide otherwise, now that the MoU will no longer be applicable starting tomorrow, the public may soon experience unwarranted increases in bank charges and interest rates as the banking sector seeks to recover what it lost since January.
Instead, we believe Gono should have put a ceiling to charges on transitory deposits. We know for sure that most of these are salaries of poor hardworking citizens. These deposits are by statutory arrangements that salaries have to be made through banks.
Given that people have no other option to get their salaries, being charged unreasonably by banks is akin to committing a heinous economic crime of diabolic proportions. We know for sure that some banks are known to be ruthless on charges. Employees are not responsible for the malaise that government has holed itself into. Could this be a sign of failure by Gono and the government? Failure can’t be defined more than this. How on earth can one allow for the introduction of higher bank charges in a country where people are already shunning the banking sector?
It is our humble view that Gono was supposed to introduce policies that encourage people to transact through banks; policies that encourage saving. In light of what has happened, we wonder who would keep their hard-earned cash in a bank when they know they will be charged heavily for that?
The country is already reeling from the effects of the liquidity crunch yet they go on to charge more for the few people who would have used the banks to transact. Given past experience, there is no way banks will continue offering affordable banking services to the public in order to spur financial inclusion initiatives already in place.We wonder whether there was any thought process on the revocation of the MoU which 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.
It remains to been seen what will become of the already hard pressed consumer.