MPs query high bank charges

Parliamentarians have queried high bank charges, demanding answers from the Ministry of Finance and Economic Development on how they can be brought down for the benefit of the transacting public.

Zimbabwean banks are notorious for high charges, a development that is discouraging many from banking.

Posing a question in Parliament Wednesday Gutu East MP Berita Chikwama said: “My question is directed to the Minister of Finance.  Minister, is there any mechanism or plan which makes banks reduce their bank charges which are highly charged especially on payments, transactions or transfer, be it ZIPIT or RTGs?”

Mutare Central legislator, Innocent Gonese, said it was regrettable that banks were making a lot of money from charges instead of loan interests.

“My understanding of banking is that banks must make their profits from lending,” said Gonese.

“In other words, they borrow money or get deposits at lower rates of interest and then lend money to borrowers who then pay higher levels of interest.  What is Government doing to ensure that the essence and principle of banking where banks are supposed to make money through lending and not through the levying of bank charges can be rectified thereby lessening the burden on people who have deposited their money having to bear the brunt to sustain the operations of banks?

In his response Finance and Economic Development deputy minister Clemence Chiduwa concurred with Chikwama that bank charges were exorbitant.

“I would like to accept what has been submitted by Hon. Chikwama that bank charges on transactions that are being levied by our banks are on the upper side,” he said. 

“We have engaged our banks and the primary reason they are fighting for high bank charges is because of the software system they are using. Most of the systems they are using are imported.  We need to continue revamping our availability of forex so that we reduce the costs of imported software.  We are also saying they should look at having those solutions locally.”

Chiduwa added: “In terms of the short term management of costs, we may not be having the solution on that but in the medium to long term, we are looking at the availing of forex to the bank and also trying to get the local solution.”

He further explained that in terms of the operations of banks, commercial banks and all institutions that are allowed to lend are free to provide lending facilities, but it is up to the individual bank to look at the risk profiles of those who are applying for loans. “We are not limiting,” he said. 

“What only limits the bank is the risk profile but the other issue that is also affecting banks is the unavailability of funds to do the lending programmes.  We should also take into account the issue of sanctions that have affected our banks in terms of the extent to which they can get international credit lines that they can give out to those who are looking for land.  Banks are free to provide loans but they also consider the risk profiles of those who are looking for loans.”

Chiduwa added: “In terms of when we are likely to have a local solution, I think I would need to engage the Bankers Association of Zimbabwe and then come with a Ministerial Statement.”

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