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 major policy shift by authorities increasingly concerned that high transaction costs are driving depositors away from banks and undermining efforts to formalise the economy.
“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 the 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.
“Please be guided accordingly that the Reserve Bank of Zimbabwe is waiting for your submissions.”
The intervention comes amid growing concern that local banks have increasingly relied on non-funded income, particularly fees and commissions, rather than traditional lending, allowing them to remain profitable despite a fragile economic environment that has weighed heavily on most 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 negligible.
For many customers, the charges have become a bitter pill to swallow, fuelling perceptions that banks are thriving at the expense of households and businesses already grappling with high operating costs.
Government officials fear the trend is discouraging savings and pushing economic activity back into cash-based informal channels, a reversal of financial sector reforms pursued over the past decade.
Finance, Economic Development and Investment Promotion Minister Mthuli Ncube recently described prevailing bank charges as excessive and damaging to economic productivity, underscoring that authorities are preparing wider reforms to reduce the cost of doing business.
Professor Ncube said a full report on the cost of doing business in the financial services sector would soon be presented to Cabinet, as part of broader measures to improve competitiveness, strengthen compliance, and stimulate economic growth.
Authorities are now considering sweeping reductions not only in bank charges but also 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 move, describing it as a long-overdue step toward fairness and affordability in the financial sector.
“The directive by the Reserve Bank of Zimbabwe (RBZ) to reduce bank charges is a progressive step toward protecting consumers and improving affordability within the financial sector.
Reduced bank charges will lower the cost of transactions, consumers will retain more of their income instead of losing a significant portion to service fees, improve disposable income, particularly for low-income earners, SMEs, and informal traders who are highly sensitive to transaction costs and enhance transparency and trust – excessive and unclear charges have historically eroded public confidence in the banking sector,” Mpofu stated.
She said high bank fees have effectively functioned as a hidden tax on consumers, deterring account usage and undermining financial deepening.
“This move will encourage the unbanked to open accounts, many people, especially in rural and low-income communities, avoid banks due to perceived high costs, promote digital transactions – affordable transaction fees make electronic payments more attractive than cash and support SMEs and informal traders – lower charges reduce operational costs and improve sustainability for small businesses,” Mpofu said.
“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.”
The regulatory push could force banks into a difficult adjustment period, analysts say, as institutions heavily dependent on fees and commissions confront the prospect of reduced non-interest income and a renewed emphasis on lending-led growth.
This may result in subdued top-line performance in the near term, but policymakers argue the long-term gains, stronger deposit mobilisation, higher financial participation, and increased economic formalisation, will outweigh short-term revenue pressures.