Breaking News

Banks to reduce charges substantially

by Staff reporter
01 February 2013 | 3782 Views
BANK charges will soon be reduced substantially following negotiations between the banking sector and the Reserve Bank of Zimbabwe amid concerns that the current level of charges was against international banking practice.

Reserve Bank Governor Dr Gideon Gono disclosed this while presenting his 2013 Monetary Policy Statement in Harare yesterday.

Full Monetary Policy Statement here

He said 25 banks yesterday signed a memorandum of understanding that will chart the way forward.

"Zimbabweans across the board are agreed that the level of bank charges is out of line with international best practice. It is heartening to note that after 75 days of negotiations, the Reserve Bank of Zimbabwe and the banking sector came up with an agreed framework which will see substantial reduction in bank charges," said Dr Gono.

Some of the issues covered under the MoU include a clause that the participating financial institutions will be obliged to pay interest on amounts of $1 000 and above held over a period of at least 30 days.

The agreement also sets cash withdrawal fees, debit card and ledger fees.

He said 14 out of 22 banks had met the first level of minimum requirements by 31 December last year.

Five other banks, Dr Gono said, had made "significant" progress towards complying while two others needed to come up with more "credible" recapitalisation plans.

The central bank raised minimum capital levels for banking institutions last year with commercial and merchant banks required to have capital levels of $100 million from $12,5 million and $10 million respectively. Minimum capital for building societies were raised from $10 million to $80 million, finance and discount houses from $7,5 million to $60 million and $1 million to $5 million for microfinance institutions.

They should be fully compliant by June next year, but were required to meet 25 percent of the new capital levels by 31 December last year.

"In the interest of transparency and accountability, I am pleased to report that a total of 14 banking institutions met the 31 December 2012 minimum threshold," said Dr Gono.

Banks that have complied are CBZ Bank, Standard Bank, Stanbic, BancABC, Barclays, ZB Bank and Kingdom. Others are Ecobank, FBC Bank, MBCA Bank, TN, CABS, Tetrad and NMB Bank.

Agribank, FBC Building Society, Trust Bank, Metbank and ZB Building Society banks have made significant progress, Dr Gono said, adding that the other two, ZABG Bank and Capital Bank, still need to come up with their recapitalisation plans.

ZABG Bank was negotiating for a $40 million facility with the National Indigenisation and Economic Empowerment Fund. Interfin remains under curatorship.

Dr Gono said the central bank had finalised a blueprint of the Banking Sector Vision 2020. The vision is centred around the pursuance of banking sector solvency and stability to anchor sustained economic growth and development.

It seeks to achieve, among other things, a thriving banking sector with functional lender of last resort and active inter-bank market, the establishment of universal banks and an integrated framework, adequately capitalised and competitive banking sector with the ability to support the funding needs of the economy.

Dr Gono said the banking institutions would be required to subject themselves to annual external credit rating assessments by credit rating agencies accredited by the RBZ.

The governor also unveiled measures to support the small to medium enterprises sector which would see 30 percent of total loans advanced to SMEs.

Given the current banking sector loans of $3,5 billion as at 31 December 2012, an allocation of 30 percent to the SME sector will translate to loans of  $1,05 billion.

"Given the foregoing banking institutions are required to reorient their portfolios such that loans to the SME sector should constitute at least 30 percent of the total loan book. The Reserve Bank will conduct monthly assessments to monitor compliance and any institution found wanting, will face severe penalties," he said.

Dr Gono said the RBZ was in the process of coming up with credit bureaus, with the completion of the framework targeted for March 2013. The credit bureaus provide information to subscribers about individuals and corporates or any other institutions' creditworthiness.

On the indigenisation of foreign owned banks, Dr Gono said the RBZ was working closely with the Ministry of Youth Development, Indigenisation and Empowerment to ensure that all banks observed the laws of the land and complied in an orderly manner.

"The process to indigenise the banks should, however, take cognisance of the sensitivities around the operation of the banks to restore confidence, trust and stability in the sector".

Dr Gono also expressed concern over the increasing circulation of fake US dollar and South African rand in Harare, Bulawayo and other parts of the country. He urged people and retailers to be on the lookout for such fake notes.




He challenged microfinance institutions, who have been accused of charging high interest rates, to justify their high rates as some of them have been charging rates of up to 33 percent.

"We cannot tolerate that. All microfinance institutions are required to justify interest rates and all other charges levied on borrowed funds as well as adequately disclose their business conditions".

Banks Charges

Source: TC

Should Miss World Zimbabwe have been dethroned?

Yes
35.1%
No
60.58%
Not sure
4.33%
208

Comments

News Updates

Email:

Latest News

Photo-journalist attacked by police - Freelance photographer, Crispen ...

by Stephen Jakes | 05 July 2015 | 1144 Views

Michael Jackson Smooth Criminal impersonator - Video goes viral - ...

by Staff Reporter | 05 July 2015 | 1068 Views

Mphoko, Khaya-Moyo in nasty fall out

by Staff Reporter | 05 July 2015 | 2711 Views

Zanu PF Youths invade Bhasikiti’s farm

by Staff Reporter | 05 July 2015 | 1355 Views

Skyz Metro FM to broadcast BCC events live - Bulawayo's first commerci...

by Staff Reporter | 05 July 2015 | 947 Views

Cuthbert Dube denied Canadian visa

by Staff Reporter | 05 July 2015 | 1530 Views

Was Pokello Nare over priced at $25 000?

by Staff Reporter | 05 July 2015 | 1120 Views

Mliswa labels Mujuru, Mutasa as cowards, distances himself from People...

by Staff Reporter | 05 July 2015 | 1534 Views

Lodges installing hidden cameras to record and sale p*rnography - A fo...

by Staff Reporter | 05 July 2015 | 2552 Views

Government ditches non Five Leveled' ECD teachers for untrained O'Leve...

by Stephen Jakes | 05 July 2015 | 1271 Views

Zim Asset is failing - "In pursuit of a new trajectory of accelerated...

by Tendai Kwari @tendaikwari | 05 July 2015 | 726 Views

Sovereign Wealth Fund board appointed - A new board of the Sovereign W...

by Staff Reporter | 05 July 2015 | 637 Views

Prophet hands over murder suspect to police - A suspect in the murder ...

by Staff Reporter | 05 July 2015 | 2040 Views

Rife prostitution forces hotel closures - The Zimbabwe Tourism Author...

by Stephen Jakes | 05 July 2015 | 1945 Views

Traffic cop knocked down at roadblock

by Staff Reporter | 05 July 2015 | 2121 Views

Council worker attempts suicide at work premises over salary - A Shuru...

by Staff Reporter | 05 July 2015 | 1380 Views

Broke teacher steals sanitary pads

by Thobekile Zhou | 05 July 2015 | 1450 Views

Govt to train few nurses - THE Government is drastically trimming enr...

by Thobekile Zhou | 05 July 2015 | 1090 Views

Joshua Nkomo 'probably turning in his grave' - Sibanda - HARARE - Jabu...

by Staff Reporter | 04 July 2015 | 2800 Views

Biti offers new economic blue print, 'HOPE': - with no political refor...

by Wilbert Mukori | 04 July 2015 | 3709 Views

Mugabe back home - President Robert Mugabe, who is the current chair ...

by Staff Reporter | 04 July 2015 | 2436 Views

Tunisia President declares a state of emergency - Tunis - Tunisia Pres...

by Staff Reporter | 04 July 2015 | 2389 Views

SADC appoints committee of 13 on Lesotho crisis - The SADC Double Tro...

by Staff Reporter | 04 July 2015 | 2021 Views

Stop being cry babies Highlanders says Ezra Tshisa Sibanda - Dynamos v...

by Ezra Tshisa Sibanda | 04 July 2015 | 4173 Views

Mnangagwa hands over sports facilities to Bulawayo City Council

by Staff Reporter | 04 July 2015 | 2699 Views

Two people feared dead in elevator accident in Bulawayo - Two people ...

by Staff Reporter | 04 July 2015 | 6480 Views

Zimbabwe among countries with highest TB rate - Zimbabwe is one of the...

by Staff Reporter | 04 July 2015 | 2253 Views

MDC T Official blast Zanu-PF over vendors fiasco - THE MDC-T Bulawayo ...

by Stephen Jakes | 04 July 2015 | 2253 Views

Entertainment

Bigger and Better Women's Day Gospel Festival

by Entertainment Reporter | 03 July 2015 | 2233 Views

Silence Is Not Peace!, Says Bongani Ncube

by Nkosini Tshuma | 02 July 2015 | 3368 Views

Zimbabweans fail to answer a simple question like who is your former p...

by Staff reporter | 02 July 2015 | 4405 Views

Zim Achievers to host first ever winners and nominees reception - Win...

by Arts Correspondent | 02 July 2015 | 1878 Views

Team Bulawayo UK Shows cancelled - The Team Bulawayo UK shows which we...

by Thulani Nkala | 02 July 2015 | 2344 Views

DStv adds new channel for Zimbabwe viewers

by Staff reporter | 01 July 2015 | 10227 Views

Rihanna Duct Tapes Floyd Mayweather's Mouth Shut at BET Awards

by Staff Reporter | 30 June 2015 | 9064 Views

Professor wants out of Kalawa - KWAITO star Professor wants out of Ka...

by Staff reporter | 30 June 2015 | 6415 Views