Africa-Press – Zimbabwe. The government has said it cannot order banks to reduce their charges which have been described by the banking public as astronomical.
Speaking in the National Assembly on Wednesday during a question and answer session, Finance and Economic Development Deputy Minister, Clemence Chiduwa, said more than 84 percent of bank profits come from bank charges.
Chiduwa was responding to Mabvuku-Tafara legislator, James Chidhakwa, who wanted to know the government’s position on high bank charges and fees charged by money transfer agencies. Said Chiduwa:
The bank charges that are being levied by our financial institutions are very high.
Even if we look at the performance of our banks, above 84% of their profits come from bank charges.
We have engaged the banks and BAZ (Bankers Association of Zimbabwe), and the major reason that they have given us is that most of their solutions are imported.
We have implored BAZ to say, “Let us try to ensure that the solutions that we use in Zimbabwe are local solutions.
At the moment we cannot direct them to reduce the bank charges but what we are saying collectively as BAZ, they need to re-look at their charges so that they are in line with the market.
They need to make sure that they are competitive and seek local solutions, especially for the software they are importing.
However, Harare East MP, Tendai Biti, contended that the government should put a cap on bank charges and also lower the interest rate, which is currently at 200%, “to allow business to have oxygen.” Said the former Finance Minister:
Surely, the Ministry of Finance must regulate or cap bank charges. Equally, the interest rate of 200% is too high.
Most people in this august House are farmers and business people. You cannot borrow money at 200%. The interest rate of 200% is choking business.
The interest rate of 200% is unprecedented in the history of economics.
The government must lower the rates of interest to allow business to have oxygen.
High-interest rates of 200% are driving this economy into a recession because business is borrowing.
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