Breaking News

Banks to reduce charges substantially

by Staff reporter
01 February 2013 | 3508 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 airtime and street vendors pay the $1 a day State levy?

Yes
10.68%
No
83.08%
Desperation
6.24%
721

Comments

News Updates

Email:

Latest News

'US owns the Ebola virus' - A Kenyan businessman has reportedly made c...

by Staff reporter | 22 August 2014 | 1425 Views

'Musona will not be joining Kaizer Chiefs' - Cape Town - Knowledge Mus...

by Sports reporter | 22 August 2014 | 1054 Views

Tsvangirai, Khupe the only solution to Zimbabwe's woes - In our artic...

by Dlayila Omuhle | 22 August 2014 | 1368 Views

Tsvangirai - Congress is not the panacea but dialogue is

by Tawanda Tshabangu | 22 August 2014 | 870 Views

New Zimbabwe Highway Code to tame road carnage - THE Traffic Safety Co...

by Staff reporter | 22 August 2014 | 1631 Views

Tsvangirai's letter to Sadc - Fulltext - Attn: The Chairperson Sadc Tr...

by Morgan Richard Tsvangirai | 22 August 2014 | 970 Views

Zuma insulted SA Parliament says EFF

by Staff Reporter | 22 August 2014 | 1822 Views

Dilemma for SA Zimbabweans (the makwerekweres) - RAIDS come fast, furi...

by Andrew Kunambura | 22 August 2014 | 3794 Views

Spruce-up Order on Kombis Now

by Suitable Kajau | 22 August 2014 | 1276 Views

'700+ companies shut down since the election,' says Tsvangirai

by Morgan Tsvangirai | 22 August 2014 | 1792 Views

A reflection of SADC as Ian Khama takes the deputy chairmanship - The ...

by Peacemaker Zano | 22 August 2014 | 1530 Views

Mystery of a kitchen party - Chipo's dream was slowly becoming a reali...

by Mufaro Gracious Marira | 22 August 2014 | 3173 Views

How to apply for a bail - Bail application is whereby an individual wh...

by Mufaro Gracious Marira | 22 August 2014 | 689 Views

Mugabe to get $4 billion China bailout

by Staff reporter | 22 August 2014 | 2604 Views

Mysterious fire burns down city house

by Staff reporter | 22 August 2014 | 2491 Views

Will Grace Mugabe swim stormy Zanu-PF waters?

by Owen Gagare | 22 August 2014 | 2266 Views

Mugabe's US lobbyist sentenced to 7 months in jail - A CHICAGO activis...

by Staff Reporter I Agencies | 22 August 2014 | 1570 Views

Zapu warns Mugabe - THE opposition ZAPU party has said fresh farm inva...

by Staff reporter | 22 August 2014 | 2657 Views

Army chief almost lost residential stands worth $70,000 - Zimbabwe Nat...

by Fungai Lupande | 22 August 2014 | 1951 Views

'I don't compete with women,' says Mujuru - Vice-President Joice Mujur...

by Staff reporter | 22 August 2014 | 4160 Views

Soldier receives $1 500 land allocation bribe

by Staff Reporter | 22 August 2014 | 1481 Views

Man in trouble over fake diamonds

by Luthando Mapepa | 22 August 2014 | 1268 Views

Woman seeks help to undergo kidney transplant

by Staff Reporter | 22 August 2014 | 1032 Views

Prophet Magaya 'demands sexual evidence' evidence' - Leader of PHD Min...

by Staff reporter | 22 August 2014 | 2354 Views

Triangle cries foul on Bosso win - Highlanders 1-0 Triangle UnitedHIGH...

by Sikhumbuzo Moyo | 22 August 2014 | 2118 Views

Man admits raping daughter

by Staff reporter | 22 August 2014 | 2039 Views

Entertainment

Zimbabwean model to host Big Brother launch - Model, presenter and ac...

by Staff reporter | 21 August 2014 | 2053 Views

Star FM's, Admire Taderera sent on forced leave - Star FM boss Admire ...

by Staff reporter | 21 August 2014 | 4021 Views

Zimbabwean businessman, Tapfuma Nzara, creating a valuable lifestyle brand in SA

by Janine Dube, www.onevybe.com | 21 August 2014 | 4329 Views

Ex-Q dumps wife and 2 kids, elopes with Sugar Mummy - Flamboyant rappe...

by Staff reporter | 20 August 2014 | 4592 Views

DJ Cleo's goalkeeping dream going nowhere

by Staff reporter | 20 August 2014 | 2795 Views

New MaZimba film out soon

by Staff Reporter | 19 August 2014 | 3408 Views

The Real D2 Revealed

by Staff Reporter | 19 August 2014 | 1532 Views

Munotidako charms Macheso - Controversial lyricist Jacob Moyana charme...

by Tawanda Marwizi | 19 August 2014 | 2549 Views