Just In: Banks now compelled to pay interest

by | Jun 21, 2021 | Business | 0 comments

Pretty Manyewe

The Reserve Bank of Zimbabwe (RBZ) has directed banks to pay their depositors with interest rates, in instances where they would have kept money in their accounts for long periods.

In the past, banks were deducting funds from depositors instead of paying interest.

In a statement RBZ Governor Dr Mangudya, he advised said he has engaged with the Bankers Association of Zimbabwe on the need to comply with Statutory Instrument 65A of 2020 on the payment of interest on savings accounts.

“To this end, interest rates on deposits that shall be offered by banking institutions, effective from the 1st of July 2021, minimum of five percent per annum on savings accounts in Zimbabwean dollar and minimum of 10% per annum on fixed term deposits made in Zimbabwean dollar. For those in USD, interests rates will be a minimum of one percent per annum for savings accounts and a minimum of 2.5 percent per annum for fixed term deposits,” he said.

“There will be no bank charges on savings accounts and fixed term deposits. Demand and call accounts are transactional accounts from which funds deposited can be withdrawn at any time and without advance notice and hence, in line with the global practice, banking institutions will not be able to pay interest on such transitory deposits,” said Mangudya.

The move is likely to see increased trust in the banking sector, which has over the years been eroded by practices which include –but not limited to- not paying interest rates.