THE Reserve Bank of Zimbabwe (RBZ), the country’s central bank, has launched a blitz to force major cash dealers to deposit their money with financial institutions amid a sharp fall in cash deposits in recent weeks, by imposing withdrawal limits and planning to introduce bond notes that will be paid out to exporters as an incentive.Finance
Minister Patrick Chinamasa says starting this month, the central bank will start monitoring banking trends of major cash generators such as wholesalers, retailers, fuel dealers and mobile phone companies alleging that some players are selling cash, and were not depositing cash as required by the law, resulting in a 40 percent drop in cash deposits last month. “The RBZ had been closely monitoring cash deposit trends within various banks, where it was generally noted that cash deposits had declined by an average of 40 percent during the past month of May,” Chinamasa says.
He said the government was implementing various measures to address the cash crisis including promoting the use of plastic money, foreign exchange stabilization and importation of lower denominations of the US dollar that do not appeal to people who move money out of the country.
The southern African country, which had adopted the US dollar as the major trading currency, has been grappling with an acute shortage of the greenback notes since March this year. which has seen the central bank instituting various measures to deal with the cash crisis.
The central bank blames the cash shortages on money laundering and a widening trade deficit.
The impending introduction of the bond notes has triggered panic withdrawals by clients and a decline in deposits. The measure, covered by the Bank Use Promotion Act, was aimed at alleviating the cash crunch, says Chinamasa. The Act compels traders and parastatals to deposit money, including surplus cash, within two days of receiving it unless it has good cause for not doing so.
The minister said there had been a rise in the number of point of sale (POS) machines to 17 448 by April 2016 from 4 258 in 2012 partly as a result of a government directive last month for government ministries, state entities and local authorities to install POS machines.
Zimbabwe is using a basket of nine currencies after abandoning its hyperinflation ravaged currency in 2009 but the US dollar has now emerged as the main currency.
Meanwhile, some Zimbabwean banks have tightened cash withdrawal restrictions and are imposing new measures to curb illegal transactions and capital flight after clients have resorted to double dipping to beat the on-going cash shortages.
In a notice, one of the foreign-owned banks Stanbic said it was taking measures to restrict illegal activities such as mobilization of funds from other account holders and/or from customers of other banks into one’s accounts to facilitate cash withdrawals, trading hard currency/cash in exchange for Real Time Gross Settlement (RTGS) payments into one’s account and opening multiple accounts to facilitate excessive cash withdrawals.
FBC Bank also recently suspended RTGS transfers onto its prepaid MasterCard facility, citing abuse by some customers.
FBC’s prepaid MasterCard is a debit card that can be used to make both local and international payments as well as withdrawals. The card is not account based and is available to the bank’s depositors and those who do not hold FBC bank accounts. – edited by Patience Rusere