RBZ moves to restore confidence in the banking sector

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THE Reserve Bank of Zimbabwe (RBZ) has undertaken to improve banking sector stability and raise financial inclusion in the medium-term as the apex bank moves to restore confidence in the banking system.

by BErNARD MPOFU

A number of banks collapsed before 2009 when dollarisation was introduced.

The post-dollarisation period has seen eight banks — Genesis, Capital, Interfin, AfrAsia, Tetrad, Royal, Trust and Allied — going under, prejudicing depositors of their hard-earned cash and destroying trust in banks, key financial intermediaries.

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RBZ deputy governor Khupukile Mlambo told delegates attending the official opening of the refurbished Standard Chartered Bank priority banking branch at Sam Levy’s Village on Thursday that the central bank had put in place measures that would ensure the banking sector was safe and sound.

He added that the RBZ was working with bankers to drive financial inclusion.

Financial inclusion, or inclusive financing, is the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society, in contrast to financial exclusion where those services are not available or affordable.

Financial inclusion in Zimbabwe, according a government commissioned study, FinScope Consumer Survey, rose to 77% last year from 60% in 2011 driven by mobile money platforms.

“As the central bank, there are two objectives that we want to promote in the medium-term —banking sector stability and financial inclusion,” Mlambo

“The banking sector is generally safe and sound . . . We have actually put in place a financial inclusion committee at the central bank that is working on a strategy.”

Standard Chartered head of retail banking for Africa and Middle East, Jaydeep Gupta, said the bank, which has been operating in Zimbabwe over the last 120 years, remains committed to this market.

The bank also launched its Infinite Visa card, a debit card for high net worth individuals.

“Our clients are in for a surprise as we will also be launching a new exclusive card to our priority clients that will afford them a number of benefits, making life easier and more enjoyable. Once again, Standard Chartered is the first bank in the country to introduce this product to the market,” he said.

Official figures show that as at September 30 2015, total banking sector deposits and loans amounted to $5,5 billion and $4 billion, respectively, translating to a loan-to-deposit ratio of 72,7%.

The sector remained profitable during the period ended September 30, 2015, with an aggregate net profit of $86,09 million, compared to $24,35 million recorded in the same period last year.

The central bank says the banking sector is adequately capitalised with a capital base of $916,81 million as at September 30 2015 and an average capital adequacy ratio of 21,5% against the regulatory threshold of 12%.

5 COMMENTS

  1. What is a priority right now is to end the shortage of bank notes. Depositors are failing to withdraw their money from the banks on demand why? What is RBZ doing about this problem? Very few businesses are deposting their daily takings in their bank accounts becos if they do Zimra,NSSA etc will garnish their accounts. Since notes have to be imported banks need foreign exchange to buy the notes from foreign banks. If local banks do not have foreign exchange earnings then its a problem to import these notes. Is the shortage of bank notes not compounded by bond coin swaps while notes are being exported to finance imports? RBZ should give us answers to these questions.

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  2. Banks should stop overcharging on monthly service fees; give reasonable interest on moneys kept by clients in bank accounts; do away with proof of residence requirements when someone has already given them their contact address and other personal information. Managers who give themselves loans, or their friends and acquaintances, going on to pay back nothing to the bank, should be made to complete the rest of their life on the planet in prison.

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