Harare - Zimbabwe’s Finance Minister Tendai Biti has come down hard on banks and is working towards regulating the lending and deposit rates they charges.
In his 2013 budget speech, Biti proposed that banks pay a minimum interest rate of 4% per annum for all term deposits from a minimum of US$1 000 for 30 days.
Currently most Zimbabwean banks are not paying interest rates on savings and current account deposits.
Biti also proposed that there should be no bank charges for all deposits of less than $800.
On lending rates, he said banks will not be allowed to charge more than 10% interest rates on loans.
“The Central Bank and the Bankers Association of Zimbabwe will sit together and craft a memorandum of understanding on the manner in which the lending rates will be defined,” he said, adding that banks will also take into account the cost of money.
The memorandum of association will then be converted into a statutory instrument.
Biti said Old Mutual and the National Social and Security Authority (NSSA) had agreed that their local bank deposits, which constitute 40% of the country’s deposits, be loaned out at 10% at bank level.
The two institutions and the banks will then agree on how best to share the 10% interest.
Currently lending rates in Zimbabwe range between 15-30%.