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Banks Retrench

Staff Reporter 21-05-2009

Zimbabwe banks have embarked on massive retrenchment exercises as a way of trying to keep afloat.

Banks are taking advantage of the relatively low salaries agreed on in February this year to unload some of the workers.

It was agreed in February that the lowest paid employee would get a minimum US$120, and this is the figure which is being used when calculating benefits for retrenches.

While details are still hazy, some bankers who spoke to Business Zimbabwe said retrenchment was a reality and two of the financial institutions had already filed to that effect with the relevant authorities.

“There is uncertainty in the industry as it is still not clear who is going to be affected by the retrenchment exercise. It appears most of the banks have decided to retrench not one segment but all levels from management to the shop floor. So far we are told that Metropolitan Bank and Kingdom Bank have already filed for the retrenchments and it is now up to the authorities to give the green light or stop the retrenchments,” said a source in the banking industry.

It is also believed that another large financial institution is also looking at how it would best approach the issue of retrenchments.

Banks for quite some time had been doing well which was against the grain as all the other sectors of the economy were stuttering.

However, there was change of whether with the introduction of the multi-currency system as fewer people chose to bank.

Even before the introduction of the multi-currency system, banks suffered a massive image problem when there was massive cash shortages which saw people queuing for money for an entire day with no luck.

Big businesses have also been lethargic in terms of banking preferring to channel cash generated elsewhere.