Governor of The Reserve Bank of Zimbabwe Dr John Panonetsa Mangudya has engaged banks to craft modalities on the implementation of Statutory Instrument 65A of 2020 compelling the institutions to pay interests on deposits.The RBZ Governor revealed this when he appeared before the Portfolio Committee on Information, Communication Technologies, Posts and Courier Services.
The directive was issued to promote financial intermediation and to stimulate production, however, the banks have not observed the directive.
“We need to operationalise it to ensure that there is consistency between the letter and spirit of that Instrument and what’s happening on the ground,” he said.
Dr Mangudya said some of the deposits were call deposits which needed to be separated from other deposits that could be used for onward lending, for the purposes of paying the interests.
Funds from call deposits can be withdrawn on demand.
Dr Mangudya said there was general agreement within the financial services sector on the need to pay interests on deposits.
“We hope the consultations would be concluded by the end of the week or early next week,” he added.
Observers have noted that the high bank charges being levied by banks have discouraged savings as they erode people’s earnings and limit lending to various sectors of the economy