Banks must ‘democratise’

Africa Moyo – Sunday Mail Reporter

Reserve Bank of Zimbabwe Governor Dr John Mangudya says banks must introduce low-cost accounts and slash high costs of opening of the same to make banking services more accessible.

Dr Mangudya implored bankers to emulate financial institutions in South Africa, India and Canada where low-cost accounts are prevalent.

In his Monetary Policy Statement last week, he said: “The Reserve Bank is pleased to note that some local banks are already providing low-cost bank accounts to the banking public in Zimbabwe.

“In order to widen such initiatives and promote financial inclusion, the Reserve Bank and the Bankers’ Association of Zimbabwe (Baz) have resolved that banks without low-cost accounts should at least provide the banking public with basic banking services at low or no cost with the following minimum features: account opening deposit of US$5; depositors to earn some interest on the balance in their account; no balance statement fees; average account balance of US$300; and copy of national Identity Card (ID) suffice for account opening.”

The pro-poor pronouncement comes as a relief to depositors who have for long complained over extortionate charges by banks for account maintenance and withdrawal.

Most banks are charging between US$10 and US$50 for account-opening, coupled with stringent requirements such as proof of residence and payslips with a net monthly salary of US$350.

Market watchers say high bank charges discourage a savings culture as potential depositors opt to keep cash.

Stanbic Bank charges a monthly service fee of US$5, levies of 1,5 percent for automated teller machine withdrawals and one percent for banking hall withdrawals; in addition to US$30 to open a personal savings account.

Standard Chartered Bank charges US$50 for the initial deposit, US$6 monthly service fees, US$3 for ATM withdrawals and 1,5 percent for banking hall withdrawals.

CBZ has launched the SmartCash account, where a person needs just a national identity card and US$5 to sign up.

South Africa’s low-income transacting account is called Mzansi Account, which was developed in line with the commitments of that country’s Financial Sector Charter requiring.

About 2,5 billion working-age adults globally have no access formal financial services. In Sub-Saharan Africa, only 24 percent of adults have a bank account.

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  • Zatta Zvayi

    That long report would have done with an Executive summary. We are too busy to comb through all that verbiage to find the nuggets of the policy.
    Saw something on reducing prices- how? The best way to reduce prices is to remove the tax component and put the national fiscus in a worse situation!