News / National
Banks deducting civil servants arrears direct from their accounts
08 May 2015 at 07:02hrs | Views
Several banks have resorted to deducting money owed to them by civil servants directly from their accounts instead of receiving it from the Salary Service Bureau (SSB) after government's continued failure to remit deductions despite effecting them, the Zimbabwe Independent reported.
The cash-strapped government has not remitted money deducted in March and April from civil servants' salaries to banks owed by government workers through loans despite the deductions reflecting on payslips.
The situation means that affected civil servants are now in arrears in respect of payment of debt and other financial obligations, and could find themselves enduring double deductions.
The SSB, which processes government salaries, is supposed to remit money deducted from civil servants for payment of debts from banks, pensions, life policies, funeral covers and policies as well as medical aid subscriptions to the Premier Medical Aid Society (Psmas) which mostly comprises government workers.
They may also not be able to get health cover from their medical aid society. According to sources, government remits an estimated US$36 million monthly deducted from its workers to different institutions.
Banks say government, increasingly struggling to meet its civil service salary obligations as the economic crisis worsens, had in the past been transferring the money to banks without delay, but delays are now disturbing day to day operations.
Banks are currently saddled with more than US$700 million worth of bad debts. Sources said the move by banks would put government under increased pressure as it would have to pay salaries in full without any deductions.
The cash-strapped government has not remitted money deducted in March and April from civil servants' salaries to banks owed by government workers through loans despite the deductions reflecting on payslips.
The situation means that affected civil servants are now in arrears in respect of payment of debt and other financial obligations, and could find themselves enduring double deductions.
They may also not be able to get health cover from their medical aid society. According to sources, government remits an estimated US$36 million monthly deducted from its workers to different institutions.
Banks say government, increasingly struggling to meet its civil service salary obligations as the economic crisis worsens, had in the past been transferring the money to banks without delay, but delays are now disturbing day to day operations.
Banks are currently saddled with more than US$700 million worth of bad debts. Sources said the move by banks would put government under increased pressure as it would have to pay salaries in full without any deductions.
Source - Zim Ind
