Banks depend on depositors’ money and there is therefore a need for banks to encourage people to bank money. The culture of banking is slowly dying and banks are largely to blame for this problem.
Many people are now keeping money at their homes despite the fact that it is very risky. Some businesses are also keeping money in safes at their business premises and many of them have fallen victim to burglars. In the past businesses used to bank money daily and even after businesses hours there were facilities to enable them to deposit money at the banks.
High bank charges are largely to blame for the death of the banking culture and as rightly noted by the President, Cde Robert Mugabe, depositors are losing the value of their savings. President Mugabe said banks seem to have imposed their own sanctions against the people, including those who deposit money with them. “It’s only banks where time reduces deposited savings instead of growing them,” said President Mugabe.
He said people are being punished for depositing savings with banks instead of being rewarded. The President said banks were undermining economic growth by charging exorbitant interest rates and other charges that eroded depositors’ savings.
Cde Mugabe described the interests rates regime as extortionist, saying even small deposits were not spared the bank charges. He said it was for this reason that the Minister of Finance and Economic Development Cde Patrick Chinamasa and the Reserve Bank of Zimbabwe Governor, John Mangudya, were looking at strategies to reform the banking sector.
President Mugabe said government wanted to come up with a system which ensured depositors get value for their money.
The banking sector has in the past acknowleged that the bank charges are prohibitive but it is taking long to address the problem. The onus is on the banks to come up with incentives that encourage businesses and individuals to keep their money in the banks.
Depositors’ money should earn interest as was the case in the past and the bank charges should be very low. The liquidity challenges that the country is facing is partly as a result of a lot of money being kept in the homes and at business premises.
This money should be at the banks but as long as the savings lose value with time at the banks, many people would rather keep the money at home despite the risk of losing it to thieves.
Banks should not wait for government to force them to do what is logical which is to come up with packages that encourage or promote the banking culture.
We want to once again implore banks to urgently address the issue of high bank charges as well as reward depositors by paying interest on deposited money as was the case in the past.