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RBZ undertakes to improve confidence in banking sector

RBZ undertakes to improve confidence in banking sector

HARARE: The Reserve Bank of Zimbabwe (RBZ) has undertaken to improve banking sector stability and raise financial inclusion in the medium-term as the apex bank moves to restore confidence in the banking system. A number of banks collapsed before 2009 when dollarisation was introduced.

The post-dollarisation period has seen eight banks — Genesis, Capital, Interfin, AfrAsia, Tetrad, Royal, Trust and Allied — going under, prejudicing depositors of their hard-earned cash and destroying trust in banks, key financial intermediaries.

RBZ deputy governor Khupukile Mlambo told delegates attending the official opening of the refurbished Standard Chartered Bank priority banking branch at Sam Levy’s Village on Thursday that the central bank had put in place measures that would ensure the banking sector was safe and sound. He added that the RBZ was working with bankers to drive financial inclusion.

Financial inclusion, or inclusive financing, is the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society, in contrast to financial exclusion where those services are not available or affordable. Financial inclusion in Zimbabwe, according a government commissioned study, FinScope Consumer Survey, rose to 77% last year from 60% in 2011 driven by mobile money platforms.

“As the central bank, there are two objectives that we want to promote in the medium-term —banking sector stability and financial inclusion,” Mlambo “The banking sector is generally safe and sound . . . We have actually put in place a financial inclusion committee at the central bank that is working on a strategy.”

Standard Chartered head of retail banking for Africa and Middle East, Jaydeep Gupta, said the bank, which has been operating in Zimbabwe over the last 120 years, remains committed to this market. The bank also launched its Infinite Visa card, a debit card for high net worth individuals.

“Our clients are in for a surprise as we will also be launching a new exclusive card to our priority clients that will afford them a number of benefits, making life easier and more enjoyable. Once again, Standard Chartered is the first bank in the country to introduce this product to the market,” he said.

Official figures show that as at September 30 2015, total banking sector deposits and loans amounted to $5,5 billion and $4 billion, respectively, translating to a loan-to-deposit ratio of 72,7%. The sector remained profitable during the period ended September 30, 2015, with an aggregate net profit of $86,09 million, compared to $24,35 million recorded in the same period last year.

The central bank says the banking sector is adequately capitalised with a capital base of $916,81 million as at September 30 2015 and an average capital adequacy ratio of 21,5% against the regulatory threshold of 12%.