Bank charges still high

Published: 16 January 2014

Zimbabwean banks' non interest income constitute on average an estimated 55 percent of their total income.

This estimation is based on calculations done by BH24.

Banks have been indicating in some reports that the MOU signed between the Reserve Bank and banks has been reducing their income since most of it comes from non interest activities such as account charges, transaction fees and other charges.

Some banks may justify that these high rates are there because there is no liquidity in the economy and because they need to survive but really, are banks justified to have such exorbitant charges especially considering the fact that the majority of the population in the country earns below $550?

Is this not exploitation by the banks?

"Zimbabwean banks need to do banking and by going out there to search for businesses that is to sell money to genuine capable buyers rather than waiting for the most risky business to come and borrow from them," said Mrs Cherish Ratisai, an economist with the University of Zimbabwe.

Some economists are of the view that Zimbabwean banks are not being diligent in conducting the actual business and this is a culture that has resulted in them charging exorbitant fees on their clients.

However, in as much as it is acknowledged that banking activity is being crippled by the lack of the lender of last resort function of the RBZ, it is also important that banks re-strategize and focus on earning their income and profits from their core business if a credit reference bureau is established this may also promote more efficient banking business and may improve bank profitability.
- bh24