Government Appeals To Banks To Reduce Charges

Government Appeals To Banks To Reduce Charges

Finance, Economic Development and Investment Promotion permanent secretary George Guvamatanga has pleaded with banks to lower charges and fees to lure the unbanked into the formal system.

This comes as bankers have noted low deposits in savings accounts as the bulk of deposits are transitory.

Treasury and the central bank have been advocating lower banking fees to attract the estimated US$2,5 billion circulating outside formal channels.

Speaking during post-budget briefing last Wednesday, Guvamatanga encouraged the banks to initiate moves that attract people to keep their money in banks.

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“Now let me come to an interesting issue of confidence in the banking sector. There is a need for work on government’s part, which we are trying. On the government’s part, what we have realised on the issue of stability, the issue lies in confidence. That is why stability is the overarching issue here,” Guvamatanga said.

“The issue is on (bank) charges. Banks please. Someone commented that we no longer have banks in this country. When I put money into your account, you pay me later. You make a cash withdrawal, you withdraw $100 000, the bank takes its 2% or 3% commission and sometimes there is no limit. When you walk away from the bank, you walk away with $97 000. So, the question is, are we encouraging the depositors to bank their money?”

He accused banks of focusing on non-core business away from lending.

“And because they are all now focused on this non-funded income, instead of focusing on the core business, which is you lend, you get interest, you get a little bit of non-funded income. Most banks are now at 60% to 70% in non-funded income. It never used to happen,” Guvamatanga said. Newsday

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