Banks scrap around for deposits

SOURCE: BANK OF BOTSWANA
SOURCE: BANK OF BOTSWANA

There is an extensive hunt for deposits in the commercial banking industry as banks have run out of loanable funds due to a prolonged period of over-extended lending without a commensurate growth in deposits.

A snap survey of the banks’ deposits rates shows that the liquidity crunch has pushed up the cost of funds for the banks as deposits rates have risen, a development that will further squeeze profit margins in the prevailing low lending rates environment.

In the past six months, deposits rates for smaller depositors have slightly gone up from an average of about 3.75 percent to 4.10 percent for six months fixed deposits. For 12-months fixed deposits have gone up   from 4.15 percent to 4.75 while two-year deposits has gone up from 4,5 percent to five percent. 

Editor's Comment
Who watches the watchdog?

For a fact, in a democratic society such as Botswana, the media plays a crucial role of being watchdog, holding the powerful to account and exposing all possible wrongdoing for the benefit of the public.There has been a nagging question about who watches the watchdog after all? Perhaps, the investigations into alleged wrongful acts implicating those supposed to be playing the watchdog role will shed more light into what has happened such that the...

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