RBZ, banks meet halfway

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MONETARY authorities and banks have reached an understanding that allows the central bank to waive a requirement demanding them to pay interest on call and demand deposits.
However, the banks are still required to pay interest on savings accounts and fixed term deposits. Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya, said the apex bank had held discussions and reached an agreement with the Bankers Association of Zimbabwe (BAZ) on compliance with their statutory obligations on sureties.

This comes after the authorities gazetted regulations in March, which required every banking institution to pay interest on call, demand, savings deposits and mobile banking trust accounts at rates of not less than half of the prevailing Treasury Bill yield at any given time.

“The bank wishes to advise the banking public that it has engaged BAZ on the need to comply with Statutory Instrument 65A of 2020 on the payment of interest on savings accounts.
“To this end, interest rates on deposits shall be offered by banking institutions, effective July 1, 2021.

“The bank also advises the public that demand and call accounts are transactional accounts from which funds deposited can be withdrawn at any time and without advance notice and hence, in line with global practice, banking institutions will not be able to pay interest on such transitory deposits,” Mangudya announced this week.

He said banks would now pay a minimum of five percent per annum on savings accounts in local currency and one percent for accounts in United States dollars.
A minimum of 10 percent per annum will be paid on Zimbabwe dollar fixed term deposits and 2,5 percent on fixed term US$ deposits.

Mangudya also said there will be no bank charges on savings accounts and fixed term deposits.
The relaxation of banks’ obligations on deposits come as the monetary authority last week announced its resolution — following consultations with big business — to focus on enforcing its latest exchange control and trading rules.

Last week Mangudya said after engagements with business on Statutory Instrument 127, the apex bank would continue to ensure that the economic gains registered since the introduction of the foreign exchange auction in June 2020 would not be jeopardised.

“Going forward, and in line with recommendations from the business community on the need to continue to enhance stability in the economy, the bank’s efforts to foster compliance in terms of SI 127 shall be limited to outliers that wantonly abuse the foreign exchange auction system, exchange rate manipulation and non-compliance with anti-money laundering rules and regulations.

“The bank’s focus on these key areas, coupled with business’s reality check, self-discipline, self-monitoring and peer-review, will sustain inflation and exchange rate stability that are necessary for the economy to continue to rebound,” he emphasised.
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