mushayavanhu bankers ass 03.08.10.jpgThe Bankers Association of Zimbabwe (BAZ) says while it hails the improvements in deposit levels, it is concerned with transitory deposits which have made it difficult for the banks to have long term plans.

The local banking industry which is currently operating at around 40 % is still facing a number of challenges which include capital constraints and absence of lender of last resort.

Giving an update of the current operations within the banking industry, Bankers Association of Zimbabwe President, Mr. John Mushayavanhu noted that while the sector is committed to supporting the productive sectors, overnight deposits have made it difficult for banks to operate viably and restricted them from issuing out long term loans.

“We have seen an improvement in deposit levels. However, our worry has been the continued existence of overnight deposits, a situation which has restricted us from issuing long term loans to our clients,” said Mr Mushayavanhu.

Observers and economic analysts however say banks need to come up with more aggressive strategies in order to survive in the current operating environment through the adoption of cost effective measures and attracting of foreign finance options.

The banking industry currently has 29 banking institutions with deposits hovering around US$1.8 billion.