Impact of regulatory framework on deposit mobilization by Standard Chartered Bank

Abstract

The purpose of this study was to establish if the Reserve Bank of Zimbabwe has put in place policies and regulatory frameworks that impact on deposit mobilization by financial institutions. The study also aimed at ascertaining whether these policies would influence the behavior of depositors as they make savings decisions. Standard Chartered Bank Zimbabwe was used as a case study as it was easier for the researcher since they are employed by the bank thus making it possible for the researcher to access information from the bank employees and the bank customers. Data was collected through a survey, and a research questionnaire was used to both the bank staff and the bank customers. A sample of 50 was drawn from the population through the use of stratified random sampling technique and elements of the sample were from Africa Unity Square and Robert Mugabe branches of Standard Chartered bank for ease of access to the researcher. The questionnaires were self administered and of the 50 questionnaires that were administered, 42 were completed and returned. The study found that the majority of the respondents were of the opinion that the Reserve Bank of Zimbabwe’s supervisory function became ineffective in 2009 after losing its role of being lender of last resort. This era was preceded by the hyperinflation era experienced by the country during the period 1997 to 2008. The respondents witnessed the slashing of zeroes by the central and how deposits were eroded by inflation and the lack of suitable policy, and as a result felt that the Reserve Bank of Zimbabwe was not doing enough to protect depositors’ funds. Most customers who participated in the study indicated that the banks products did not meet their needs. They also noted that banks are charging high interest rates not in tandem with international rates. The majority of the respondents indicated that the Reserve bank regulatory framework was adequate for the supervision of banks and were familiar with the Reserve bank Act and its responsibilities regarding supervision.