Bank deposits grow by five percent
BANK deposits have grown by about five percent in recent months with more United States dollars finding their way into the financial institutions compared to bond notes.
Speaking at an inaugural gold sector awards in Harare on Friday night, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya said a number of measures introduced by the Central Bank have seen the country’s financial sector regaining its confidence.
The awards were held under the theme: “Recognising gold producers’ contribution to national output and foreign currency generation”.
Contrary to some sections which insist that deposits in the country’s financial institutions had slumped due to lack of confidence by the banking public on the sector RBZ is on record as having said there was a marginal increase in the amount of money finding its way into the formal financial system.
“Deposits are at about $6,2 billion, they grew by about five percent . . . What we have noticed is that there is confidence which has gone back to the market whereby those people that had withdrew their deposits in US dollars because of lack of confidence have started getting them back. When you are in an economy like ours where the disposable income is low you can’t afford to hold the money, it means at some point in time you will have to go and pay school fees and buy food.
“So if people talk about shortage of cash it’s more like a psychological problem otherwise the economy itself is now ticking forward. If you check a lot of banks have more foreign currency and in the market we have bond notes. In terms of quantum bond notes are low in value than the US. So you cannot use bond notes more than the US so people use the US that’s why we are maintaining the multiple currency system and we are happy about that,” said Dr Mangudya.
He said RBZ was satisfied with the circulation and how the public had embraced it.
“We are quite happy because the circulation of bond notes is very good . . . one can buy what they want from the shops with bond notes and because the shop owner doesn’t want to keep it as they want to return the value of the US dollar, there is no hoarding of the bond notes. Any form of notes or currency throughout the whole world is a medium of exchange,” said Dr Mandudya.
He also expressed satisfaction over the growth in the electronic payment field and embracement of plastic money by the public over a short period but was quick to warn retailers to desist from charging exorbitant premiums on Point of Sales (POS) machines. RBZ has registered about 30 000 POS machines for use by various institutions in the country.
At the end of June 2015, Zimbabwe had 15 908 POS terminals, a number which increased to 16 363 by the end of December 2015. As the liquidity situation in the economy worsens service providers have been forced to introduce payment alternatives that accommodate customers using mobile money and card services.
“We are advising traders not to charge premiums for plastic money because it discourages people using them but we are quite happy with how they have been embraced. If you check the big shops 60 to 70 percent its plastic money and its only been one year. From 12 percent to 60 percent that would be asking for too much,” said Dr Mangudya.
Meanwhile, the ceremony saw outstanding small-scale and large-scale producers being honoured for their various contributions in the gold sector. The gold sector awards are a brainchild of the Minister of Mines and Mining Development Walter Chidakwa, which seeks to recognise the contribution of the small and large-scale miners to the national gold output and foreign currency generation.
The awards are envisaged to be an annual event rewarding top gold producers, millers and buying agents. One of the recipients, Mr Trynos Nkomo said the awards were a good initiative towards encouraging miners to increase production but hinted that there was need for them to be held at provincial levels first before proceeding to the national level so that they could attract more gold producers.
Mr Nkomo, who is one of the country’s biggest small-scale producers and most experienced miners, was the first runner-up for the Best Buying Agent in Matabeleland South Province.