Zimbabwe’s banking sector has come under fresh regulatory pressure after the central bank ordered financial institutions to urgently reduce transaction fees, a move authorities say is critical to rebuilding public confidence and drawing consumers back into the formal financial system.
In a directive issued to banks in late January, the Reserve Bank of Zimbabwe warned that escalating charges were attracting growing criticism and risked undermining national efforts to promote financial inclusion and economic formalisation.
RBZ Governor John Mushayavanhu told banks to immediately review their fee structures and submit proposals for reduced charges, particularly in an environment of relatively low inflation.
“The banking sector has come under heavy scrutiny and criticism for high bank charges and fees,” Mushayavanhu said, adding that lower costs were necessary to “promote financial inclusion and enhance public confidence in using domestic financial institutions.”
Regulators are increasingly concerned that steep account maintenance fees, transaction costs and withdrawal charges are discouraging savings and pushing individuals and businesses toward cash-based informal channels.
This trend, authorities warn, threatens to reverse years of financial sector reforms aimed at broadening participation in the formal economy.
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The directive also reflects unease over banks’ growing reliance on non-interest income, particularly fees and commissions, at a time when lending to productive sectors has remained subdued.
While i this model has helped banks remain profitable in a fragile economy, depositors have seen little benefit, with savings earning minimal interest while service charges continue to rise.
Finance and economic policy officials have echoed the central bank’s concerns. Mthuli Ncube, the Minister of Finance, Economic Development and Investment Promotion, recently described prevailing bank charges as excessive and harmful to productivity, citing monthly account fees of up to US$15 for individuals and US$20 for corporates, alongside withdrawal charges of as much as 3%.
“These are significant costs that affect both business operations and ordinary citizens,” Ncube said, noting that a comprehensive report on the cost of doing business in the financial services sector would soon be presented to Cabinet.
Consumer groups have welcomed the intervention. Consumer Council of Zimbabwe chief executive Rosemary Mpofu said high bank fees had effectively acted as a hidden tax on consumers, discouraging account usage and eroding trust in the banking system.
“Reduced bank charges will lower the cost of transactions, improve disposable incomes and make banking services more affordable, particularly for low-income earners, SMEs and informal traders,” Mpofu said. “Financial inclusion is not only about access, but also about affordability.”
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