US Dollar Deposits At Zimbabwe Banks In Sharp Increase
Bank charges remain high in Zimbabwe, with Stanbic Bank (above, during the cash crunch of the Zimbabwe dollar days) getting 73 percent of its income from fees and commission and ABC bank getting 92% of its income from the same source as well as dealing commissions. The jump in deposits at Zimbabwean banks could have been much higher than it is now if these charges were reduced. But the mentality still seems to be that of milking the banking public for all they are worth.
Harare, Zimbabwe, 16 October 2009
From a base of US$200 million in February this year, deposits at Zimbabwe's banks have now reached more than US$700 million, an increase that shows people are slowly beginning to gain confidence in the banking system.
Zimbabwean banks also revealed yesterday that they have dispersed US$368 in loans to their clients, from a zero advances position in February this year, when the Inclusive Government was inaugurated.
Zimbabwe now uses a mixture of South African Rand and US dollars as the official currency of the country, with the Finance Minister, Tendai Biti, saying he is looking at complete and official adoption of the South African rand next year through joining the South African customs Union in preparation for the SADC (Southern African Development Community) goal of having monetary union by 2018.
Bank charges remain the biggest impediment to the growth in deposits, considering the salaries earned in Zimbabwe. With civil servants getting an average of US$150 a month, the banks are squeezing workers with fees and commissions.
Stanbic Bank, for instance, whom I have slammed on this blog before for their shoddy service, get 73 percent of their income from fees and commissions.
BancABC, which is how African Banking Corporation is now known, got fully 92 percent of their income from fees, commissions and dealing charges.
Barclays' Prestige Banking Division, for example, raised its monthly fees to its customers from US$5 a month to US$10 a month last week.
This state of affairs is discouraging people from depositing money with the banks. Every cents counts for most of those still in employment and they are electing to keep their money in cash rather than put it in the bank.
Meantime, mining companies representatives were on State television day before yesterday announcing that mining companies have now increased capacity to between 25% and 30%, as I revealed here last week. They insist that they will be able to meet the 60% capacity targeted by Tendai Biti in the Short Term Economic Recovery Programme, although it is unclear where this optimism comes from.
Most of them are still short on capital for new equipment and repairs. But with mineral prices surging on the international market and Gideon Gono now forbidden by Tendai Biti from taking any percentages from the incomes of mining companies (retention, he called it), the companies are more motivated now to borrow in order to resuscitate operations.