Zimbabwean banks overcharging clients

Multiple Zimbabwean banks are under scrutiny following explosive allegations that they systematically overcharged corporate clients millions of dollars through inflated interest rates and hidden fees, prompting one of the largest financial recovery efforts in recent years.

Investigations by the Zimbabwe Independent have uncovered patterns of overbilling, with a forensic accounting firm, the Interest Research Bureau Zimbabwe (IRBZ), spearheading efforts to recover funds on behalf of dozens of affected businesses. The process involves recalculating interest and Intermediated Money Transfer Tax (IMTT) charges dating back to the inception of each company's banking relationship, exposing what IRBZ claims are unlawful deductions running into millions of dollars.

A confidential IRBZ report seen by the Independent contains testimonials from over 40 entities, including both parastatals and private corporations, confirming successful recoveries. One company stated, "After investigating IMTT and bank charges on our US dollar and local currency accounts, the firm managed to recover millions of dollars which were refunded into our accounts." Another firm, citing financial difficulties, described IRBZ's efforts as "diligent" and credited the firm with successfully recovering previously lost IMTT funds.

Despite multiple confirmations, affected companies declined to comment publicly due to confidentiality agreements, and IRBZ officials also refused to speak on record.

The allegations coincide with increasing criticism of Zimbabwe's banking sector for relying on fees and commissions rather than lending to productive sectors. The Reserve Bank of Zimbabwe's (RBZ) mid-term monetary policy statement for 2025 indicates that fees and commissions surged to 45.37% of total banking income in the first half of the year, surpassing traditional interest earnings, which fell to 31.91%. This reflects a shift in business models, with banks earning more from deposit and transaction charges than from financing industry or agriculture.

Charges include the government-imposed 2% IMTT, ATM fees, point-of-sale costs, and various account maintenance fees. Itai Zimunya, chairperson of the Zimbabwe Taxpayers Association, described the sector as a "parasite feeding off the economy," highlighting how this punitive fee structure discourages formal banking and fosters "pillow banking," where individuals and businesses keep cash outside the banking system.

"What worries me most is that for people and corporate accounts, banks in Zimbabwe do not pay interest. Rather, people are punished for saving their money," Zimunya said. "In neighboring countries like Mozambique, Botswana, Zambia, or South Africa, depositors earn interest monthly. Here, banks make super profits from deposits without compensating the account holders." He called for the abolition of the IMTT, describing it as an "unjust tax on capital" that erodes competitiveness and discourages formal banking.

In response, the Bankers Association of Zimbabwe (BAZ) defended its members, stating that all bank charges and interest rates are approved by the Reserve Bank and reflect the prevailing macroeconomic environment. It noted that the IMTT is a statutory government levy, not a bank-imposed fee, and encouraged clients with concerns to approach their banks directly. The association justified the fees as necessary to cover operational costs, particularly maintaining digital infrastructure such as ATMs and online banking platforms.

BAZ president Sibongile Moyo reassured the public last week that the sector remains sound and stable, underpinned by strong regulation and supervision. "No banks are currently at risk of collapse. The banking institutions themselves are committed to sound business practices and elevated supervisory vigilance against emerging risks, complementing regulatory oversight," she said.

Zimbabwe's banking sector currently comprises 19 banking institutions, four building societies, and one savings bank. The sector recorded a profit of ZiG5 billion (US$184 million) for the half-year ended June 30, 2025, down sharply from ZiG10.4 billion (US$760 million) in the same period last year, amid shrinking lending margins and growing public dissatisfaction over high transaction costs.

The ongoing investigations and recovery efforts signal mounting pressure on banks to account for past practices and could reshape the relationship between Zimbabwe's financial institutions and their corporate clients.