Banks must be whipped back into line

WORLDWIDE banks are regarded as key engines in economic growth. They offer a wide range of services that are central to the growth of economies. In fact, it has been proven that a healthy banking sector is the catalyst to the growth of any country.

However, it has been worrying that whenever the economic challenges of Zimbabwe have been mentioned, some in the banking sector have been found with dirty hands. For many years now, some banks have been found wanting in many cases. Today if ever a survey would be taken, most people would tell you that they would prefer to keep their money in pillows than in banks. This is because some banks have become conduits of underhand deals that have continuously weighed down on efforts that the Government is putting in place to improve the lives of the people.

To just point a few, depositors rarely get value for keeping their money in banks. Instead of rewarding depositors by putting interest on the deposits, the banks are imposing ridiculously high bank charges among many other impediments. In some cases depositors struggle to withdraw their money.

The latest rot among these institutions was laid bare by President Mnangagwa on Friday while addressing the business community during a meeting in Kwekwe. President Mnangagwa said speculators, working in cahoots with some big financial services players, have been stoking inflationary pressures through borrowing Zimbabwe dollars at belowinflation interest rates and using the money to drive foreign currency gains, mainly through the parallel market platforms.

“We closed lending for eight days and within those days we discovered the rot in the banks. Out of the 16 banks only four passed the test. Others were in deep corruption. After we found the rot in the banking sector, there were two possibilities, one to expose them and the other to punish them. We could not punish them because you (clients) were going to withdraw all your money from those banks and they would fold. So, the banks pleaded with us to just punish them outside of the eyes of the public and that is what we are doing to them,” he said.

Such a revelation that there are rogue institutions among banking institutions is shocking. We feel this sector has been on a rampage for too long causing untold suffering to the masses and the economy at large. Some in the sector have been behaving like a law unto themselves, disregarding some of the basic functions they represent. They have become masters of speculation and corruption.

We understand what the President said when he said as Government they have tried to deal with the rogue institutions out of the public eye to stop some from collapsing. This is noble and the private punishment must be deterrent enough to discourage speculative behaviours from the institutions that must be helping the community.

Very soon, the country will usher in gold coins and if we are not careful again some banks will be found at the forefront in trying to manipulate the noble idea. As such we strongly believe that it is time to rein in on the financial sector. It is time not to play lenience to a sector whose last 20-year history is littered with numerous cases of waywardness. A cattle rustler is caged nine years for stealing just one beast while banking executives whose actions have somehow destroyed the whole country continue to sip champagnes and move in designer suits. We feel time has come to whip these institutions into line. It could be painful but somehow necessary.