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Business Reporter

Zimbabwe’s banking sector registered a 29,79 percent growth in deposits to $476 billion in 2021, latest statistics from the Reserve Bank of Zimbabwe (RBZ) show.

This comes as the sector has maintained profitability and stability, despite the difficult trading conditions presented by the Covid-19 pandemic over the last two years.

“Total deposits amounted to $476,35 billion as at December 2021, which represented a 29,79 percent increase from $367,02 billion reported as at September 2021,” he said.

“As part of measures to promote savings, in October 2021 the interest rates for Zimbabwe dollar savings and time deposits were increased from 5 percent and 10 percent per annum to 7,5 percent and 20 percent per annum, respectively,” RBZ Governor Dr John Mangudya said in his 2022 monetary policy statement on Monday.

All banking institutions were directed to adjust the minimum deposit rates for savings and time deposits with effect from October 2021 in order to encourage  savings.

The move buttresses Finance and Economic Development Minister Professor Mthuli Ncube’s pronouncement of Statutory Instrument 65 of 2020, which required banks to pay interest on savings accounts and fixed deposits.

Banking institutions are paying interest rates for savings and fixed deposits for both local accounts and foreign currency accounts and the bank said it would continue to monitor banks to ensure adherence to fair business practices.

In July 2021, Dr Mangudya said following successful engagement with the Bankers Association of Zimbabwe (BAZ), banks agreed to comply with the new directive after months of resistance.

The bank went on to advise the banking public that it had BAZ on the need to comply with Statutory Instrument 65A of 2020 on the payment of interest on savings accounts.

Prof Ncube is on record saying banks were quoting high transactional charges and lending rates, meaning they could afford to pay interest to depositors.

Banks are supposed to pay an interest rate of not less than 90 percent on Treasury Bills and at least 75 percent for individual and corporates’ savings for a period of 30 days.

The RBZ has also introduced deposit protection of foreign currency accounts to protect them from any losses as the Deposit Protection Corporation (DPC) implemented an explicit deposit protection scheme for the Foreign Currency Denominated Accounts (FCAs) with effect from December 31, 2021.

Said Dr Mangudya “This policy followed extensive consultations with stakeholders including the Bankers Association of Zimbabwe, the bank and the Ministry of Finance and Economic Development.”