Since June this year, my bank; BancABC changed its business conditions on personal accounts for withdrawals done at the tellers. Previously, withdrawal fee was pegged at 1% and it was moved to $3 minimum or 3% whichever is higher. Other banks followed suit with CBZ Bank increasing to $5 minimum or 2%, FBC Bank $5.50 or 3% and Stanbic Bank $3.00 or 2.5%; to name a few.
This was in response to Reserve Bank of Zimbabwe (RBZ) Governor Mangundya’s decision to reduce transactions fees; namely RTGS fees from $10 to $5 and reduction of account monthly maintenance fees across the banking sector. At about the same time; banks were issued with instructions to stop directly importing cash but rather wait for RBZ allocations. At that time banks with regional and international links such as MBCA, Stanbic, Standard & Chartered were importing their own greenbacks to disburse to their clients. Government banks which were under sanctions; CBZ Bank and ZB Bank could not access cash easily.
One public secret in Zimbabwe is; most government bodies and chefs bank with CBZ Bank. The move by foreign owned banks to import their own cash apparently upset chefs as they could not get a piece of the cake. What ensued this restriction (among other factors) was a cash shortage in the economy as clients could not access their cash on demand at the local financial institutions. RBZ Governor Dr John Mangudya had in May announced plans to introduce bond notes, which further worsened the liquidity crisis and withdrawal limits at banks were lowered from an initial $10,000 to $3,000, then $1,000, came $500, $100 and then now $50 to $20; all happening in a space of 6 months.
Bond notes came last week and all banks have since run out of the local currency. In line with Dr Mangudya’s pronouncements; no bank ATM has been disbursing any bond notes thus; banking clients can only make withdrawals within banking halls at the business conditions mentioned in first paragraph.
Now that the bond note withdrawal limits have been set at $50 per day and $150 per week; and banks are charging $3 minimum per withdrawal transaction; what it means is depositors are paying an effective transaction fee which is a whooping 6% of the value of the transaction. Now compare that to 1% at the beginning of the year! Depositors are effectively leaving 5% of the value of their cash withdrawals with banks. So imagine if you are an FBC banking client and you have to max out your cash withdrawals per month of $600, the bank would have charged you $66; or an effective 11%; $60 more than what you would have been charged 6 months earlier. Even worse when the bank can only disburse $20 per day; this number increases to 27.5% bank charges per transaction. Now, imagine what you can spend your $60 on; a basket of goods to feed a family of four for a whole month!
Seeing that the RBZ Governor has and is doing absolutely nothing about it; it leaves one to wonder; is Mangudya in cahoots with banks to rob depositors? It certainly appears as if he is.