Sikhulekelani Moyo, business journalist
The financial services industry should provide a package of incentives and improve customer services to encourage the public to deposit their foreign currency, economic analysts said.
Citing the wave of armed robberies involving large sums of foreign currency suffered during the year, analysts said these revealed the public’s lack of confidence in the formal banking system.
The risk of exposure to theft attacks is high once thieves know that the money is kept in the home or on business premises.
Association for Business in Zimbabwe (ABUZ) managing director Victor Nyoni said the banking industry should be concerned about these thefts and find ways to attract deposits.
He blamed the high costs of bank charges and poor customer service for frustrating potential forex depositors.
When people deposit their money in banks, it builds public and business confidence in the formal system and helps money flow through the economy.
“High bank charges and taxes are the issues that cause people to choose to keep their money at home or at their business premises, which makes them targets for armed robbery,” Nyoni said.
He said the problem of long queues at banks also discouraged companies from putting their money in the bank. âCan you imagine spending five hours in a queue to withdraw wanted money for business transactions that day? ” he said.
Instead of frustrating customers, Nyoni said, banks should come up with incentives that attract deposits.
âIn the ’80s and’ 90s deposits earned interest, but that is no longer the case despite the fact that banks make huge profits from people’s money every year. Instead, depositors are charged to keep their money in the bank, âhe said.
Mr Nyoni said allowing depositors to get loans from their bank could be an incentive that encourages people to deposit their money.
He said banks should also share with depositors the interest they receive from loans, because the money they advance to individuals or businesses in the form of loans is depositors’ money.
Zimbabwe generates more foreign exchange through exports, income from diaspora remittances and support from development partners covering different projects, which is expected to reach $ 7 billion this year.
Although the government has allowed dual transactions involving both local currency and forex, there are concerns that some businesses, mainly those operating in the informal sector, will cash in forex products.
Bulawayo banking expert and businessman Mr. Morris Mpala said it was almost impossible for such players to deposit their forex.
He said that these businessmen are aware of the problems of wanting to withdraw their money, which is why many of them keep it in their homes.
âIf you calculate the fees, which include the 2% tax, 2-3% transaction costs and other fees, that depositors face, that’s a lot of money,â Mpala said. .
He said many businessmen therefore opt for âhome bankingâ which is uncertain as they are vulnerable to theft.
Mr Mpala said that the banking public has always expressed contempt for the inconvenience encountered in terms of withdrawal limits, whereby a person cannot withdraw the desired amount at any given time.
âAs a businessman you may need to restock, but banks have a withdrawal limit, which ends up getting in the way for businesses. Therefore, home banking is considered the best, âhe said.
Contacted for comment, a Metbank banking official who preferred anonymity acknowledged the concerns but said the public should not fear the unknown, saying not all banks have problems.
âSome banks have very good service and I encourage people to compare the services in order to get the best deals,â he said.
The Reserve Bank of Zimbabwe (RBZ) has ordered banks to pay interest on savings and term deposit accounts. – @ Sikhule-kelaniM1.