Zimbabwe central bank orders banks to slash punitive charges

Zimbabwe's banking sector is facing mounting regulatory pressure after the Reserve Bank of Zimbabwe (RBZ) ordered financial institutions to slash bank charges in a decisive move aimed at restoring public confidence, deepening financial inclusion and steering consumers back into the formal financial system.

The directive signals a significant policy shift by authorities increasingly concerned that high transaction costs are driving depositors away from banks and undermining efforts to formalise the economy.

In a letter dated January 29, 2026, seen by Business Times, RBZ Governor John Mushayavanhu instructed banks to urgently review and reduce their fee structures, warning that the sector had come under "heavy scrutiny and criticism" over escalating charges.

"Further to our meeting on ease of doing business, the banking sector has come under heavy scrutiny and criticism for high bank charges and fees. In line with Government policies and strategies as articulated in National Development Strategy (NDS 2), the banking sector should reduce charges and fees to promote financial inclusion and enhance public confidence in using domestic financial institutions.

"In this regard, the banking sector is implored to urgently come up with reduced fee structures and reward savings especially under the prevailing low inflation obtaining in the economy," Dr Mushayavanhu said, adding that the central bank was awaiting submissions from financial institutions.

The intervention comes amid growing concern that local banks have increasingly relied on non-funded income, particularly fees and commissions, rather than traditional lending. This strategy has enabled them to remain profitable despite a fragile economic environment that has weighed heavily on productive sectors.

Depositors have borne the brunt of this shift, facing steep account maintenance fees, transaction costs and withdrawal charges, even as interest earned on savings remains minimal. For many customers, the charges have fuelled perceptions that banks are thriving at the expense of households and businesses already grappling with high operating costs.

Authorities fear the trend is discouraging savings and pushing economic activity back into cash-based informal channels, reversing gains made in financial sector reforms over the past decade.

Finance, Economic Development and Investment Promotion Minister Mthuli Ncube recently described prevailing bank charges as excessive and harmful to economic productivity. He said authorities were preparing broader reforms to reduce the cost of doing business.

"We are aware that monthly account service charges can be as high as US$15 for individuals and US$20 for corporates. Withdrawal charges can reach up to 3% of the transaction value, while money transfer and bill payment fees range between 1.5 and 3%. These are significant costs that affect both business operations and ordinary citizens," he said.

Professor Ncube added that a comprehensive report on the cost of doing business in the financial services sector would soon be presented to Cabinet as part of wider measures to improve competitiveness, strengthen compliance and stimulate growth.

Authorities are also considering reductions in licensing fees and administrative levies across key sectors to ease pressure on companies and consumers.

Consumer Council of Zimbabwe chief executive Rosemary Mpofu welcomed the directive, describing it as a long-overdue step toward fairness and affordability in the financial sector.

"The directive by the Reserve Bank of Zimbabwe to reduce bank charges is a progressive step toward protecting consumers and improving affordability within the financial sector," Mpofu said.

She noted that lower charges would reduce transaction costs, improve disposable incomes for low-income earners, SMEs and informal traders, and enhance transparency and trust in the banking system.

"Financial inclusion is not only about access, but also about affordability. Even if banking services are available, they are effectively inaccessible if they are too expensive," Mpofu added.

Analysts say the regulatory push could force banks into a difficult adjustment period, particularly those heavily reliant on fees and commissions. Reduced non-interest income may dampen short-term performance, but policymakers argue that stronger deposit mobilisation, higher financial participation and greater economic formalisation will ultimately outweigh the revenue pressures.