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Zim banks running out of cash

by Staff reporter
13 Nov 2013 at 18:34hrs | Views
Zimbabwean banks have been hit by a liquidity crisis following the July 31 polls resulting in the public failing to withdraw money in various financial institutions.

Several Harare residents told VOA Studio 7 they are failing to access their cash from banks owing to the shortage of money that the banks are reportedly experiencing.

One such resident is Mathias Masunda, who said he went to his local Metropolitan Bank on Wednesday intending to withdraw some money, but only managed to get half the intended amount.

Other banks that are reportedly failing to disburse cash on demand include the Commercial Bank of Zimbabwe and Agribank.

"Authorities should tell us what is really happening because we do not know why the cash is not readily available at the banks," said Masunda.

Another Harare resident, Byron Mutingwende, said the cash problems are being worsened by citizens who are not depositing money into financial institutions due to the uncertainty that he claimed was created by the disputed July 31 polls that saw President Robert Mugabe romp to a landslide win against former Prime Minister Morgan Tsvangirai of the Movement for Democratic Change.

Masunda, however, said there is no cash circulation in both the formal and informal market resulting in most people failing to deposit anything in the banks.

"We just do not have the money. We can't even feed our families let alone having some money to deposit in banks," he said.

Mutingwende said the delay by Finance Minister Patrick Chinamasa to announce the 2014 national budget has fuelled the problem as economic players are not sure how to invest their money.

Chinamasa said he will not be announcing the budget anytime soon to allow for wider consultations.

He urged authorities to review interest rates so that the public can have confidence in the banking sector.

Meanwhile, Zimbabwe Bankers Association president, George Guvamatanga, said his association is engaged in talks with the central bank with a view to revising the rates.

In September this year, most banks - locally-owned and foreign - reported a decrease in interest income dragged by a Memorandum of Understanding (MOU) signed in February.

Under the MOU, banks would, with effect from last February, charge up to 0,5% of the cash withdrawal amount subject to a minimum charge of $2,50 while ledger fees, maintenance and service fees will cost up to $4 per account.

Source - voa