Banks hike withdrawing fees by 50%

Banks will increase cash withdrawal charges under the Zimswitch platform by 50% from the current $2, starting from October - in a development likely to draw the ire of depositors.

Depositors have in the past complained of high bank and interest charges.

One of the financial institutions, ZB Bank confirmed the development in a recent circular.

"Branches and Departments are advised that Zimswitch ATM cash withdrawal fees by off-US customers have been reviewed upwards.  This refers to the cash withdrawal fee charged to a non-ZB cardholder accessing cash through a ZB ATM machine. This is an industry agreed position and therefore should our own customers utilise another bank's ATM to withdraw cash, they will be charged a minimum of $3  as well," he bank said.

A senior executive with Zimswitch, also told The Zimbabwe Mail, on the sidelines of the company's 20th anniversary that the decision was a collective industrial position.

"It is not a single bank decision but an industrial decision to increase the fees and Bankers Association of Zimbabwe is aware of this. The obvious reason for this increase is that the cost of servicing those ATMs is very high," he added.

According to central bank statistics, the country's financial system has about 550 automated teller machines (ATMs). Of the 550, 393 are networked to Zimswitch, with an estimated twenty one financial institutions subscriptions to the Zimswitch service.

Zimbabwe has 19 operating banking institutions, comprising 15 commercial banks, one (1) merchant bank and three (3) building societies, as well as one (1) savings bank and 156 microfinance institutions.

The increase comes as the central bank is on a campaign to encourage banks, payment systems providers, businesses and individuals to use Point of Sale (POS) machines, ATMs and other electronic payment systems.

The Reserve Bank of Zimbabwe says, as at December 2013, the POS density stood at 400 machines per 1 million, which falls short of the world average of 1300 machines.

It said it was targeting a POS density of 600 by year end, as well as a POS machine for every till machine within 5 years.

Over the years, Zimbabwe has increasingly evolved into a cash economy with a notable rise in the propensity by many formal and informal corporates as well as individuals to settle transactions in cash - inspite of the central bank's efforts to promote electronic means of payment.