Zimbabwe’s banks are making a killing from charges levied from their customers with over 84% of their profits coming from charges, Deputy Minister of Finance Clemence Chiduwa told Parliament.
He said the government had engaged the banks and their association and they said the main reason was that most of their solutions were imported.
“We have implored on BAZ to say let us try to ensure that the solutions that we use in Zimbabwe are local solutions. At the moment we cannot direct them to reduce the bank charges but what we are saying is collectively as BAZ, they need to re-look at their charges so that they are in-line with the market and they need to make sure that they are competitive and seek for local solutions, especially for the software they are importing,” Chiduwa said.
Asked to review the high interest rates of 200%, Chiduwa said this was basic economics.
“This is basic economics because the interest rate is supposed to follow the inflation rate. At the end of the day, what investors want is to ensure that they will get a positive return,” he said.
“As the inflation rate moves, the interest will also move in tandem but for this peculiar case in Zimbabwe, what we wanted was to nip the speculative bubble that was there.
“People were borrowing money in order to participate in the parallel market and there was no production which was happening.
“In the case of production, what we have done as a government is, for those who are borrowing for speculation we will apply the 200% interest rate but for those who are into production we are using 100%. So, I think this is in order and is basic economics.”
Q & A:
HON. CHIDAKWA: Thank you Mr. Speaker Sir. I am directing my question to the Deputy Minister of Finance. It has become expensive to transfer and withdraw money from banks and other money transfer systems or agencies. What is Government policy position on tax exemption for the poor and vulnerable population such as pensioners and those living with disabilities? Thank you Mr. Speaker Sir.
THE HON. SPEAKER: What is the issue about the people you have mentioned?
HON. CHIDAKWA: It is on the exemption Mr. Speaker Sir. The charges are too high.
THE HON. SPEAKER: The tax exemption?
HON. CHIDAKWA: Yes Mr. Speaker Sir.
THE HON. SPEAKER: Thank you.
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