WARNING: Zimbabwe Banks To Soon Charge Higher Costs For Cash Withdrawals

WARNING: Zimbabwe Banks To Soon Charge Higher Costs For Cash Withdrawals
Published: 2016 June 10 09:03:43 (1799 Views)

THE Bankers Association of Zimbabwe (BAZ) is in talks with the central bank to review bank charges in line with prevailing market conditions, which would result in higher charges on cash requirements, as it moves to promote the use of plastic money.


Electronic transactions would attract lower costs, BAZ president, Charity Jinya told a parliamentary portfolio committee this week.


“What we must accept we should be moving to lower costs for electronic transfers and higher costs for cash requirements, as a country, because it is expensive to import cash and it is not in our best interest to allow cash to be withdrawn and have it disappear through systems that we are failing to manage or control as a country,” she said.


Jinya told the Parliamentary Portfolio Committee on Finance and Economic Development that she expected the parties would reconcile on its thinking “very soon”.


“We are mindful of the negative impact on our customers, as banks. We are in discussions right now with the RBZ to make sure that as we look at this problem globally and not just on an individual or bank basis so that we have a common understanding of the work load bank employees are going through to process those amounts and also the impact of that cost on our customers,” she added.


Jinya said the swift and fast transition to a cashless society was recommended by encouraging the use of plastic money, adding the move could be achieved by creating an enabling environment, which would culminate in reducing the cost of transacting in plastic money.


Jinya said the use of plastic money and electronic transfers should take place on a widespread basis in an effort to curb the problem of cash shortages prevailing in the economy. 


She said government should give tax incentives to financial institutions to encourage them to install more point-of-sale facilities.


Since the calls for the public to move from hard cash to plastic money, retail stores have seen an estimated 50% spike in plastic money usage.


Early this year, Reserve Bank of Zimbabwe governor, John Mangudya said there was need for a cashless society to reduce the use of hard cash, adding that the central bank was aiming for an 80% cashless society by 2020.


But critics say high charges by banks dissuade people from using plastic money instead of cash, adding that the system was also unreliable. Critics say the economy has become informal, but banks have not been responsive, meaning plastic money was not feasible in the informal sector.



- NewsDay
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