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Zim’s acute cash crisis continues as job cuts loom

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Zimbabwe’s acute cash crisis characterised by banks limiting or failing to honour withdrawals has heightened fears of a fresh run on banks due to plummeting levels of confidence. Banks are currently mulling massive job cuts to ensure viability. This puts into sharp focus the stability of the financial services sector as well as banks’ financial performances, particularly post May 2016 when the cash crisis deepened after the central bank announced plans to introduce the controversial bond notes. Banks with smaller balance sheets and deposits are seen being pushed out of business because of operational challenges stemming from dwindling turnovers, interest income and worsening other non-performing loans. Sources in the banking industry said some banks are already suffering from dwindling deposits and failing to meet recurrent expenditure. Others are either failing or are taking unusually long to honour RTGs payments with some going for more than two weeks without settling. – ZimInd

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