The demand for cash has continued to rise despite the reduction in service charges by banks, which have been pushing for the use of plastic money.
A survey by Standardbusiness on Friday showed that there were still long queues at most banks. Most banks said their withdrawal limits were determined by the amount of deposits made.
Last Monday, Stanbic Bank reduced its withdrawal limit from $200 to $100, hardly a week after having taken down the limit from $500.
Of the top five banks, in terms of deposits, only Cabs and Standard Chartered were allowing clients $200 and $300 daily withdrawals respectively.
Depositors told Standardbusiness that the $100 limit was inadequate to meet their obligations.
They said although bank charges had been reduced to promote the use of plastic money, there were some expenses that required cash transactions such as rentals and utility bills in some instances.
Last month, RBZ reduced bank charges on electronic transactions, which resulted in electronic fund transfers attracting charges of between $0,33 to a maximum of $2,10 in an effort to promote plastic money transactions.
The use of plastic money is one of government’s major solutions to the current cash shortages in the country and decongesting banking halls.
Financial expert Persistence Gwanyanya said while bank queues were still visible, they had been reduced.
“Bank queues are still visible, albeit having been significantly reduced. There are two forces at play which are resulting in the decrease in bank queues. Firstly, the amounts in the bank accounts are drying up following panic withdrawals induced by the announcement of the measures to deal with cash shortages. Secondly, the banking public is quickly embracing the concept of plastic money. It is now very clear that the thrust of monetary authorities is to create a cashless society as a way of dealing with cash shortages,” Gwanyanya said.
“[The Reserve Bank of Zimbabwe] RBZ has directed banks to reduce their transactional charges in a bid to promote the use of plastic money. As banks take the plastic money route, those who fail to embrace this new reality will be left behind and will lose business. Plastic money will partly alleviate the cash shortages in the economy. We shall see the RBZ pushing for infrastructure sharing to enhance efficiency in service delivery.”
He said it did not make economic sense for individual banks to possess exclusive point of sale devices and other infrastructure needed to support virtual banking. He warned the banking sector would be like the telecoms industry where government was pushing for infrastructure sharing after players invested heavily in individual projects.
Gwanyanya said the key issue remained that of achieving “a desirable balance in both the domestic and external economy as a permanent solution to the cash challenges in the country. There is need to increase production and exports while reducing dependence on imports.”