Zimbabwe’s monetary authorities have slashed bank charges that had seen most banks charging up to US$4,50 for any amount of withdrawal.

Reserve Bank of Zimbabwe governor John Mangudya said Wednesday in a statement the central bank had noted that there had not been a “proportionate reduction in the level of bank charges”, despite a significant decrease in cash withdrawal limits.

“Against this background and as part of the on-going efforts to promote financial inclusion and to ensure that banking products and services are affordable to the banking public, the Reserve Bank has reviewed cash withdrawal charges downwards with effect from December 12, 2016,” he said.

The apex bank boss said they had introduced a proportional pricing model to replace the current fixed charges, so as to “align withdrawal charges to amount withdrawn”.

Mangudya said the applicable charges for cash withdrawal was a maximum of 1% and 1,25% of amount withdrawn from an automated teller machine and over-the-counter respectively.

“The Reserve Bank will continue to monitor the cost of bank charges to ensure access to affordable banking services and, at the same time, promote the use of plastic money,” he said.

The financial authorities have been pushing for the use of plastic money following a crippling shortage of the United States dollar on the market.

Before the shortages, the US dollar had become the favoured currency of use, in the process overshadowing other currencies in Zimbabwe’s multi-currency regime.

Zimbabwe uses a multi-currency system, where the South African rand, the Botswana pula, the United States dollar, the British pound and the European Union euro are considered legal tender.

The Indian rupee, the Australian dollar, the Japanese yen, the Chinese yuan, as well as the local bond coins, are also acceptable legal tenders.

To soften the market, the authorities have since introduced bond notes as a surrogate currency, and by end of December 2016, bond notes worth US$75 million should have been rolled out.

Only $2 bond notes are now in circulation, with $5, $10 and $20 denominations said to be on their way.

The central bank says the bond notes are backed by a US$200 million Africa Export and Import Bank loan facility.