The Chronicle
Sikhulekelani Moyo, Business Reporter
THE financial services sector should come up with an incentive package and improve its customer services to encourage the public to deposit their foreign currency, economic analysts have said.
Citing the spate of armed robberies involving large sums of forex experienced in the course of the year, the analysts said these were exposing lack of public confidence in the formal banking system.
The risk of exposure to robbery attacks is high once robbers know that money is kept at home or at business premises.
Association for Business in Zimbabwe (ABUZ) chief executive officer, Mr Victor Nyoni, said the banking sector should be worried about such robberies and devise ways of enticing deposits.
He blamed high costs of bank charges and poor customer care for frustrating potential forex depositors.
When people deposit their money in banks it promotes public and business confidence in the formal system and promotes circulation of money in the economy.
“High bank charges and taxes are the issues that make people opt to keep their money at home or at their business premises, which end up making them targets of armed robbery,” said Mr Nyoni.
He said the problem of long bank queues was also discouraging businesses from banking their money. “Imagine spending five hours in a queue to withdraw money wanted for business transactions that particular day?” he said.
Instead of frustrating customers, Mr Nyoni said, banks should come up with incentives that attract deposits.
“During the 1980s and 90s deposits used to earn interest but this is no longer the case despite the fact that banks every year make huge profits from people’s money. Depositors are instead charged for keeping their money at the bank,” he said.
Mr Nyoni said making it easy for 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 the depositors the interest they get from loans because the money they advance to individuals or companies as loans is depositors’ money.
Zimbabwe generates more forex through exports, earnings from Diaspora remittances and development partner support covering different projects, which are expected to clock US$7 billion this year.
Although, the Government has allowed dual transacting involving both the local currency and forex there are concerns that some businesses, mainly those operating in the informal sector, are not banking forex proceeds.
Banking expert and Bulawayo businessman, Mr Morris Mpala, said it was almost impossible for such players to deposit their forex.
He said these businesspeople were aware of problems associated with wanting to withdraw their money hence many of them keep it at home.
“If you calculate charges, which include the two percent tax, two to three percent transaction cost and other charges, which are being encountered by depositors, its a lot of money,” said Mr Mpala.
He said many businesspeople are as a result opting for “home banking” which is not safe as they are exposed to robberies.
Mr Mpala said the banking public has always expressed disdain over inconveniences encountered in terms of withdrawal limits whereby a person cannot withdraw the desired amount they want at any given time.
“As a businessperson you might need to restock but banks have a withdrawal limit, which end up inconveniencing businesses. Therefore, home banking is seen as the best,” he said.
Contacted for comment, a banking official from Metbank who preferred anonymity acknowledged the concerns but said the public should not fear the unknown saying not all banks were having problems.
“Some banks have very favourable services and I encourage people to compare the services so that they get the best bargains,” he said.
The Reserve Bank of Zimbabwe (RBZ) has directed banks to pay interest on savings and fixed deposit accounts. – @Sikhule-kelaniM1.
Article Source: The Chronicle