Industry raises concern over high bank charges

Published: 19 March 2014

INDUSTRY has raised concern over the high bank charges and short-term licences imposed on various sectors which are discouraging savings and investment in the country.

The Zimbabwe National Chamber of Commerce has said that since the lapse of the Memorandum of Understanding between the Reserve Bank of Zimbabwe and banks, the charges reintroduced and prevailing in the market discourage savings from both individuals and business, mainly small and medium enterprises.

The industry representative said the high taxes imposed on several economic sectors hampered long-term investment.

The ZNCC cited, for instance, cash withdrawal fees, which are pegged as a percentage of the amount withdrawn, ranging between, 0,5 to 1 percent of the withdrawable amount subject to minimum cash withdrawal amounts.

Charges for RTGS range between $5 - $20 for individuals and charged as a percentage for companies ranging from 1- 3 percent.

"These charges discourage depositors to bank money as they are heavily charged for banking services, whose cost build up or cost of operation is far less that the premium rates charged," said Mr Kingstone Kanyile, vice chairman of the ZNCC-macro economics committee.

The banks have on their part complained that the requirement by the central bank for approval before increasing charges was tantamount to unnecessary controls.

ZNCC also said the high taxes and levies passed on to the private sector for continued compliance costs in maintaining current licences as regulated by Government agencies were affecting business.

"The structure of licensing across the various economic sectors are based on short term with high renewal fees compared to other investment destinations in the SADC region," Mr Kanyile added.

Licences for the various sectors are for 12 months and subject to renewal annually by various regulating authorities. For asset management, minimum capital retirements have been set at $500 000 with the licence valid for 12 months with renewal fees of $3000.
- The Herald