ZIMBABWE'S banks stand to collectively lose US$73 million as a result of the Memorandum of Understanding (MoU) between Bankers Association of Zimbabwe (Baz) and the Reserve Bank of Zimbabwe which effected a slash on bank charges and transaction fees effective from January 2013, businessdigest can reveal.
Authoritative sources said this week most of the banks are also unlikely to meet the minimum capital requirements of US$100 million by June next year owing to revenue lost because of the MoU as well as being sapped by what the sector feels is too high a subscription fee for capitalising the Deposit Protection Board, at nearly US$20 million per bank each year.
The sources said the bankers are also unhappy at what they perceive as slow processing of their applications to recover money owed by defaulting borrowers by the courts.
The financial institutions say they are being debilitated by non-performing loans.
The sector has therefore engaged government on these and a number of other operational challenges with a view to devising long-term solutions for the benefit of the entire economy, The banks, under their umbrella body Baz, are understood to be pushing for, among other things, a review of the indigenisation policy, extension of the US$100 million minimum capital requirement deadline for all commercial banks to way beyond the current December 2014 cut-off date, introduction of policies and initiatives that restore banking confidence, as well as a review of new bank charges set under the December 2012 MoU.
Sources say the banks feel there is need for clarity on the empowerment policy since they assert that the financial services sector is already indigenised.
"The players also argued government should capitalise the RBZ and fully restore its function of lender of last resort as one of the ways of restoring confidence in the market," said a source who requested anonymity.
The MoU is said to be reasonable in terms of its objective to curtail exorbitant tariffs, but is blamed for amplifying bank vulnerabilities at a time they should be consolidating their balance sheets and pursuing initiatives that promote financial inclusion.
The banks are also pushing for clear and bold statements from the highest offices of government that the Zimbabwe dollar will not return soon, amid panic among depositors.
As much as US$1 billion worth of panic withdrawals were made out of the formal banking system two weeks after elections following statements by President Robert Mugabe that the new government was going to reintroduce the local currency.
Banks are said to be seeking immediate finalisation of the demonetisation of the Zimbabwe dollar in many forms, including issuing of special bonds for companies and payment of cash equivalents for individuals.The reimbursement of lost Zimbabwe dollar deposits is expected to boost confidence in the local banking system among depositors.
"You know there is an issue of increasing non-performing loans. Baz is saying these need to be dealt with in terms of fast tracking legal processes for recovering bad loans," said the source.
"They are also saying there should be a 0,3% limit on subscriptions being paid to the Deposit Protection Corporation with a cap of US$50 000 and that supplementary payments must be suspended for 2013," added the source.
Baz is pushing for strengthening of the 99-year leases on resettlement farm land to act as collateral for lending purposes.