THE recent remarks by Reserve Bank of Zimbabwe (RBZ) governor John Mushayavanhu on the proliferation of self-deposit boxes have sparked a crucial but contentious debate about the state of the country’s banking sector.
While the governor’s concerns about unregulated financial practices are valid, his approach risks overlooking the underlying cause of this trend: A profound loss of confidence in the banking system. Before enforcing regulations that mandate businesses to bank their cash receipts, the central bank must first address the systemic issues that have driven depositors and businesses to seek alternatives such as self-deposit boxes.
The real problem lies in the banking sector’s failure to inspire trust. High banking charges, a lack of incentives, and a history of financial instability have given Zimbabweans little reason to keep their money in banks. Unlike in other countries where depositors earn interest on their savings, Zimbabwean account holders are effectively penalised for doing so.
Exorbitant fees erode the value of deposits, making it more rational for individuals and businesses to seek alternative savings solutions.
For many Zimbabweans, the decision to use self-deposit boxes is not a deliberate attempt to evade regulations but a pragmatic response to a broken system.
The country’s history of hyperinflation, currency instability, and bank failures has left a lasting scar on the public psyche.
Memories of lost savings during the 2008 economic collapse still linger, and the introduction of new currencies and monetary policies has done little to reassure depositors.
In this context, self-deposit boxes offer a sense of security that banks have failed to provide. To rebuild trust, the RBZ must prioritise reforms that make banking attractive and beneficial for depositors. This includes reducing banking charges, introducing interest-bearing accounts, and ensuring the safety and stability of deposits.
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In other countries, banks incentivise depositors by offering competitive interest rates and low fees. Zimbabwe’s banking sector must adopt similar measures to encourage financial participation.
Moreover, the apex bank should engage stakeholders to understand the challenges faced by businesses and individuals. A collaborative approach that addresses the concerns of depositors while ensuring regulatory compliance is more likely to succeed than a punitive one.
By fostering dialogue and implementing necessary reforms, the RBZ can create an environment where banking is seen as a secure and advantageous option.
Mushayavanhu’s concerns about the risks posed by unregulated self-deposit boxes are legitimate, but they must be addressed within the broader context of Zimbabwe’s banking sector challenges.
The RBZ cannot expect to enforce regulations effectively without first restoring confidence in the system.
As we highlighted, high charges, a lack of incentives, and a history of instability have driven depositors away from banks — these fundamental issues must be resolved before any meaningful progress can be achieved.
