FINANCIAL services group FBC Holdings Limited (FBC) says the new cash withdrawal levies announced in the 2026 national budget will help strengthen banking sector balance sheets and expand the industry’s capacity to extend long-term credit to productive sectors.
The Treasury has introduced the progressive levies, effective next year, in a bid to curb excessive cash use and encourage digital transactions.
The measures come at a time long-term lending has been declining, largely due to liquidity constraints imposed by the Reserve Bank of Zimbabwe (RBZ) and persistent uncertainty over plans to de-dollarise by 2030.
Banks have long argued that the dominance of demand deposits, which can be withdrawn without notice, limits their ability to fund long-duration loans safely.
Authorities hope the new charges will reduce cash movements and keep more money within the formal banking system. Under the revised structure, individuals withdrawing between US$1 and US$500 and corporates withdrawing US$1 to US$5 000 will pay no levy.
Withdrawals of US$501 to US$1 000 by individuals and US$5 001 to US$10 000 by corporates will attract a 2% levy, while amounts above US$1 001 for individuals and US$10 001 for corporates will incur a 3% charge.
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FBC, in its post-budget analysis, said although the revenue raised may be marginal, the broader objective is to shift transactional behaviour.
“This policy is crucial because it seeks to promote the use of digital channels for transactions,” FBC said in its post 2026 national budget analysis.
“The policy incentivises both individuals and corporations to retain funds for transactions, thereby increasing deposit retention.”
It added that the policy could boost “deposit retention”, providing banks with a more stable and cheaper funding base.
“More stable and sticky deposits provide banks with a more predictable and lower-cost funding base, strengthening their balance sheets and enhancing their capacity for longer-term lending to the productive sectors,” FBC said, noting that the measure also acts as a tool to deepen financial intermediation and improve monetary policy effectiveness.
Banking sector data shows the system remains heavily-dollarised and structurally-constrained. As at June, total sector loans and advances stood at ZiG67,5 billion (US$2,5 billion), up from ZiG27,5 billion (US$2 billion) a year earlier, with foreign currency loans making up 88,4% of the portfolio.
Deposits rose sharply to ZiG112,8 billion (US$4,18 billion), a 158,7% increase, with foreign currency-denominated deposits accounting for 84,7%.
Despite this growth, aggregate core capital stood at ZiG33,1 billion (US$1,22 billion), largely supported by retained earnings.
The figures suggest banks are liquid on paper, but their ability to scale up long-term lending remains limited by the composition of deposits, which are mostly short-term and relatively low core capital buffers.
FBC cautioned, however, that the levy could trigger unintended consequences.
“There is, however, the possibility of an adverse policy reaction, which may lead to further financial disintermediation, as the transacting public may opt to continue trading in cash,” it stated.
The Zimbabwe National Chamber of Commerce (ZNCC) also raised similar concerns.
“This levy does not address the root causes of cash preference, which are the cost of digital transactions, the lack of universal acceptance of digital payments, network unreliability, and a deep-seated lack of trust in the financial and monetary system. Instead, it punishes individuals and businesses for accessing their own legitimate funds from the formal banking system, unfairly taxing them,” ZNCC said.
“This measure is a direct and significant increase in the cost of commerce. The proposed progressive levies of 2% and 3% must be viewed not in isolation, but as a cumulative burden on top of existing banking charges, which already include ATM (automated teller machines) access fees of 2% to 3,5%.
“For a corporate entity withdrawing US$10 001, the total cost would now include a 3% levy (US$300,03) plus standard bank fees, making the total cost of access potentially exceed 6% of the principal.”
ZNCC said this acted as a steep tax on liquidity and working capital.
“Rather than driving the economy toward digitalisation and financial inclusion, it will incentivise disintermediation from the formal banking sector,” it added.