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(NEWZIMBABWE) Biti accuses banks of 'stealing'

COMMENT - Tendai Biti is inoculating himself over his stealing in the $20 million NASSA saga. Bank lending rates a usurious throughout Southern Africa.

Biti accuses banks of 'stealing'
by Paul Nyakazeya I NewsDay
24/05/2011 00:00:00

FINANCE Minister Tendai Biti on Monday accused bankers of “stealing depositors’ money” and subsequently blaming the government and the Reserve Bank of Zimbabwe (RBZ) for implementing policies they allege were not conducive for the banking sector to operate viably.

Officially opening the 38th African Insurance Organisation (AIO) conference Biti said he was happy to be among insurance industry players whose efficient operations stabilised countries.

“I was telling (Elisha) Mushayakarara when I just arrived that I am happy to be among insurance industry players after dealing with bankers the past two weeks,” said Biti.

“I have been playing with bankers a forth-night ago and it is good to be away from them. Bankers steal people’s money and then fail to supervise themselves and blame us (the government and Reserve bank).”

Mushayakarara is the chairman of the Insurance and Pensions Commission.

However, contacted for comment, Bankers’ Association of Zimbabwe president John Mushayavanhu said banks had so far done well in managing their own balances and supervising themselves.

“We have been keeping our lending deposit ratios low to manage liquidity pressure and to say we have been stealing depositors’ money — that is not what is happening,” said Mushayavanhu.

In his update on Zimbabwe’s economic performance for the first quarter of this year, Biti revealed that about 34% of bank loans had not been repaid. He expressed concern at the high loan-to-deposit ratio which stood at 76% and suggested that the sector faced a loan default risk.

Last week, RBZ governor Gideon Gono said he was compiling a comprehensive report on the soundness of each bank to be presented on June 1 along with measures the central bank would take on financial institutions found wanting.

In January, bank deposits stood at $2,36 billion, increased to $2,4 billion in February and ended the first quarter in March at $2,57 billion. On the other hand, loans increased from $1,81 billion in January to $1,88 billion in February and then to $1,99 billion, representing a loan-deposit ratio of 77,3%.

Despite the growth in the deposits base, interest on savings of 1% has remained largely low, but interest on savings of up to three months has improved to between 9% and 12%.

However, lending rates have remained unsustainably high, ranging between 15% and 30% with over 90% in short-term loans.

Labels: BANKING, LENDING RATES, MDC CORRUPTION, TENDAI BITI

posted by MrK @ 4:52 PM