Restructure benefits regime: RBZ

The Reserve Bank of Zimbabwe (RBZ) has urged banks to change the structure of benefits, which result in the reduction of operational costs that are weighing down financial institutions.

BY MTHANDAZO NYONI

Addressing industry officials at a meeting organised by the Confederation of Zimbabwe Industries recently in Bulawayo, RBZ deputy governor, Kupukile Mlambo said the difference between the deposit and lending rates was quite large due to high operational costs caused by various benefits.

“We are working on a research project right now as RBZ, actually myself and a few guys from the office. We are trying to understand what accounts for the high spreads in Zimbabwe. We are trying to decompose that,” he said.

“What is it that builds up that spread and you won’t be surprised obviously to know that the biggest chunk of that spread is operational costs of banks. When you look into the operational costs of banks and try to decompose them, the large part of that cost is personnel cost.

“So clearly, part of reasons why the charges are high in Zimbabwe is because we need to pay those tellers salaries and bank managers. But when you look at the individual amounts that are being paid to tellers and to other staff, they are not that high.”

Mlambo said what is high was top management costs through cars, the security at their houses, salaries and school fees for children at South African universities.

“So clearly, we need to change the structure of benefits in this country,” he said.

Mlambo said he was surprised when he joined RBZ from the African Development Bank in 2012 to find out that almost half of the staff at the central bank were considered management.

“But that is the group that you buy cars, service their cars, you give them school fees, housing allowance and so forth. In the African Development Bank, the only person who gets a company car is the president of the bank,” he said.

“I was the director for East Africa at that time, which is the third level because you have the president, vice-president and directors. The only thing that you get as a director is a fuel subsidy, not allowance. That’s all you get and everybody else gets a loan to buy a car. You can buy a small (or) a big car depending on how you feel you can service the loan.”

Mlambo said Zimbabwe was facing a challenge of cost of funds compared to other countries in the region, the country is ranked high.

He said the rate of cost of funds in Zimbabwe on average was 11,4% against 6% in Botswana, 4% in Mauritius, 7% in South Africa and 10,5% in Kenya.

Do you have a coronavirus story? You can email us on: news@alphamedia.co.zw


11 Comments

  1. Restructured Regime

    True, Mlambo these banks and other listed firms are being heavily weighed down by obscene benefits like school fees subsidies, generous housing loans, unlimited fuel allocations etc. Tell me is there any reason why a person staying in Harare or its surroundings should be given fuel allowances in excess of 100L per month. This is just unacceptable.

  2. Zimbabwe cannot afford such expensive perks. The same goes for government. Senior government officials including ministers should buy their own cars ,pay their own domestic workers and security. As nation the late in both the public and private sector is killing us the poor people buy primitive accumulation practices using the state and listed companies. Unfortunately the opposition parties are only eagerly waiting to step into the shoes of the current exploiters and looters who get new vehicles every three years and buy their current one at book value, while the hospitals are in dire need of supplies.
    Now they talk of spending over 400million on the new parliament which is supposed to sit 625 MPs in a nation of 14million. Compare with other countries like France and the UK with populations of over 50 million.
    God save us from these leeches , ticks and lice sucking our blood.

  3. We need people like Mulambo for telling the truth. Depositors are paying for school fees, cars, security, gardeners and maids etc for bank managers. their packs are heavy. the same scenario is in parastals where managers are given personal vehicles at the expense of operations

  4. True. The solution lies in moving to TCCM (Total Cost to Company Model)

  5. Ray of light from this analysis!!

  6. Tawanda Shumba

    To be honest Zimbabwe private sector as well is cheating consumers big time by lumping unnecessary costs.

  7. yah and they rip us through bank charges
    this is a syndrome all over Zim economy and has bred laziness and white collar thieves

  8. We need this guy good analysis not those who just think of printing money

  9. true the reason you joined rbz was because of the salary and perks. ask for a reduction in your salary and perks from your employer if he refuses you can offer part of that money to the needy like children”s homes then and only then will i consider your sentiments.

  10. bitcoins

  11. Zimbabwe’s banking system is so hostile to the depositor. The bank charges are so exorbitant. The depositor is charged for putting his/her money in the bank instead of getting some interest. A lot of people now keep their savings at home under the pillow. This has also resulted in shortages of money in circulation. Why has it taken so long for the RBZ officials to see and know that bank charges where partly responsible for the cash shortages and even the lack of capital to finance businesses. I think its because they are also benefiting from the rot. How do you expect a sane person to deposit money in a bank and tomorrow when you want your money you are told there is no cash to give you by the bank. Its so painful to spend twelve hours queing to get your own money and you are given given thirty dollars instead of the 500 you wanted. This is abuse at its highest. When will all this nonsense come to an end.

Comments are closed.