The government has said it cannot in any way direct banks to reduce their charges, which have been described by many Zimbabweans as exorbitant at a time when the economy is also underperforming.
Zimbabwean banks are said to be making over 70 percent of their profits from charges as opposed to interests on loans.
Speaking in the National Assembly Wednesday during a question and answer session with Ministers, Mabvuku-Tafara legislator, James Chidhakwa decried high bank charges.
“It has become expensive to transfer and withdraw money from banks and other money transfer systems or agencies,” bemoaned Chidhakwa.
“What is the government policy position on tax exemption for the poor and vulnerable population such as pensioners and those living with disabilities?”
In his response Finance and Economic Development Deputy Minister, Clemence Chiduwa concurred bank charges were out of this world.
“The bank charges that are being levied by our financial institutions are very high,” said Chiduwa.
“Even if we look at the performance of our banks, above 84% of their profits comes from bank charges and we have engaged the banks and BAZ (Bankers Association of Zimbabwe), and the major reason that they have given us is that most of their solutions are imported. We have implored BAZ to say, ” Let us try to ensure that the solutions we try to ensure that the solutions that we use in Zimbabwe are local solutions.”
He was however quick to say that the government cannot order banks to reduce those charges.
“At the moment we cannot direct them to reduce the bank charges but what we are saying collectively as BAZ, they need to re-look at their charges so that they are in-line with the market and they need to make sure that they are competitive and seek for local solutions, especially for the software they are importing.”
However, former finance minister, Tendai Biti was of the view that the government should do something about the issue.
“Bank charges are too high and the fact that even on his (Chiduwa) admission, banks are making profits from bank charges, seventy nine percent of bank profit is coming from bank charges when the business of banks is selling money and therefore making money from interests,” said Biti.
“Surely, the Ministry of Finance must regulate or cap bank charges. Equally, the interest rate of 200% is too high. Most people in this august House are farmers and business people. You cannot borrow money at 200%. The interest rate of 200% is choking business.”
Biti added: “The interest rate of 200% is unprecedented in the history of economics. The government must lower the rates of interest to allow business to have oxygen. High-interest rates of 200% are driving this economy into a recession because business is borrowing.”