I remember my first bank account was a Kiddy Bank account with the then Zimbank. This was around 1992 when I was still in Primary school. My father helped me to open the account on my birthday because he wanted me to learn early how to save and manage money. Eventually I forgot about it as it was not very active until when I was in high school, broke and on holiday. This was now around 1997. I approached my bank. They searched for my account and eventually I got access to my account. The money was now more than what I had initially deposited because of the interest earned.
Moving forward to present day Zimbabwe, we have lost our currency and now trade mainly using the US dollar and to a lesser extent the South African rand. The economy at large is faced with a liquidity crisis and a heavy Balance-Of-Payment trade deficit of over US$18billion. The cost of borrowing money is as high as 30% and savings earn very low interest rates to a point whereby it is pointless for a lot of nationals and informal traders to save money in banks or try to borrow. To make it worse, bank monthly charges for personal and company accounts are on average $5.00 and $20.00 respectively.
I opened a new company bank account beginning of last year and made a deposit of US$100.00. No transactions went through that particular account and no deposits where made into the account.Eventually we got an international transaction that required us to use the account and guess what, the account was closed. The account had been accruing $20.00 monthly service fees and eventually it had a negative balance and they closed the account without even bothering to notify us. To make it worse, now we had to open a new account and start the whole application process all over again. We nearly lost the client and this was an international transaction which eventually brought in the much needed forex into our local economy. The transaction was delayed by over a 2 weeks and in international trade this is unacceptable. Efficiency is everything.
There is an urgent need to redesign the banking model so that the sector can attract more deposits and be more efficient. I have noticed that cash shortages in the banks and on ATMs seem to have begun and this is very bad. Banks should quickly reduce their transaction and monthly service fees, lower borrowing interest rates and increase saving interest rates. Banks should not be so quick to close accounts in a low liquidity economy where more than 90% of the transactions are being conducted in the informal sector. Reopening closed accounts should be a very easy process. Banks need to be more creative, customer-oriented and interactive to improve their viability. The Reserve Bank of Zimbabwe (RBZ) as the banking sector and monetary policy regulating body should attend to some of these economic growth impediments. US$100.00 is a lot of money to just lose from a bank without benefiting from their services and this alone discourages banking to a large extent.