The shock abandonment of the multicurrency system by government has seen many companies facing bottlenecks in accessing hard currency on the formal banking system.
Banks are also required to pay foreign currency to suppliers of their backbone ICT platforms.
Resultantly, this has seen the domestic currency losing ground against major currencies.
The sharp rise in service charges this week infuriated long-suffering depositors who said the charges and fees banks were charging were a bitter pill to swallow.
And it seems to be working out for them.
While almost all other sectors in the country are teetering on the brink due to a sluggish economy, the local financial institutions have prospered regardless, according to recent financial statements and this is being achieved through usurious charges and interest rates on loans and services to vulnerable depositors.
The central bank recently slashed interest rates from 70% to 35% and some analysts predicted a squeeze on profits.
But, it hasn’t happened yet.
Instead of hurting the lenders’ profits, they have strengthened.
Several players in the sector say banks also sneak in a range of other fees.
A snap survey by Business Times this week revealed a general consensus among depositors that punitive charges have been detrimental to both deposits mobilisation and a fragile economic recovery process.
It is now being feared that the punitive bank charges could further diminish confidence in the turbulence financial services sector, which is critical in allocating resources in an economy.
This has resulted in several people who are gainfully employed now seriously considering receiving their salaries through other electronic platforms whose charges are much lower.
Zimbabwe is presently grappling with unprecedented financial crisis but, the punitive charges are translating into jaw-dropping margins for banks, and significantly huge costs for depositors.
In November last year, most banks were charging withdrawal fees of about 1% of the amount being withdraw.
The minimum charge was about ZWL$3 and the same amount for withdrawals done on automated Teller Machines (ATM) for cash of up to ZWL$300.
Monthly maintenance fees was about ZWL$5 for individuals and ZWL$20 for corporate. 🔗 Read Full Article
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