(HERALD) Gono slams banks
Gono slams banksTuesday, 29 May 2012 00:00
Martin Kadzere Senior Business Reporter
RESERVE Bank Governor Dr Gideon Gono has slammed banks for high bank charges, saying such “extortionist tendencies” were discouraging deposits, especially from small to medium companies.
He said he would soon issue a directive to financial institutions to charge reasonable fees and not to charge service fees on inactive accounts. Dr Gono was speaking before a Parliamentary Portfolio Committee on Small to Medium Enterprises last week.
Glen View North legislator Mr Fani Munengani had expressed concern over high bank charges and, in some cases, where debits were made even if there was no transaction.
“I am going to tell the banking sector (to) make a choice,” said Dr Gono.
“You either agree voluntarily on reasonable amounts (bank charges) and also that you do not charge any cost on any account where there has not been an transaction . . . (or) if you don’t want to give them interest, then give them (depositors) back their money if full.
“We are engaged in discussion with the banking sector and I am happy to report that it is a matter high on our agenda between the governor and the Finance Ministry. If we have to create regulations or mediate between savers and the banks . . . we have to do that.”
Dr Gono said the banks had developed a culture of wanting to make money “beyond what is reasonable”.
Out of US$4 billion bank deposits, authorities believe that more than US$2 billion could be out of the banking system.
Two weeks ago, Finance Minister Tendai Biti said Government would put in place a policy framework to address distortions of “crazy lending and non-existent deposit rates”.
He said Government had engaged the Bankers’ Association of Zimbabwe but there had been no progress.
Since dollarisation in 2009, most banks have been making much of their revenue from non-funded income, which are service fees and commissions.
While Dr Gono admitted that the banks do incur costs of running the accounts, the levels at which money was being taken “are unfair”.
On the development of SMEs, Dr Gono called for harmonisation of laws that promote growth. He also said he was concerned over what he called the ”little support” that the banks were giving to the sector, which employs about 70 percent of the working population.
In the five months to May this year, banks advanced US$164,4 million to small to medium enterprises, about 5 percent of the total advances.
Labels: BANKING, GIDEON GONO, LENDING RATES, RBZ, TENDAI BITI
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