Bank de­posits rise to $6,1 bil­lion on back of plas­tic money trans­ac­tions

Chronicle (Zimbabwe) - - Front Page - Nye­mudzai Kakore

THE fi­nan­cial ser­vices sec­tor now holds $6,1 bil­lion in de­posits owing to an up­turn in the use of plas­tic and elec­tronic money plat­forms, the Min­is­ter of Fi­nance and Eco­nomic De­vel­op­ment, Patrick Chi­na­masa, said yes­ter­day.

Min­is­ter Chi­na­masa said this was fa­cil­i­tated by the move from a cash-based economy and pay­ment sys­tem where the pub­lic has shifted to the use of plas­tic money and Real Time Gross Set­tle­ment trans­fers.

As such, Gov­ern­ment was in the process of in­stalling and ac­ti­vat­ing point of sale (POS) ma­chines in all Gov­ern­ment and quasi-Gov­ern­ment de­part­ments, he Par­lia­ment yes­ter­day

“There is no way that you can have cash to rep­re­sent the bank de­posits. Cur­rently, we have some­thing like $6,1 bil­lion in bank de­posits. There is no way you can have phys­i­cal cash of that amount. Even in the United States, it is only 10 per­cent of vir­tual money and that is money in bank de­posits,” said Min­is­ter Chi­na­masa.

“While you are talk­ing about a cash cri­sis, the cash crunch is ac­tu­ally eas­ing be­cause of the cor­re­spond­ing in­crease in use of plas­tic money. I am pleased of that cri­sis be­cause it has given us an op­por­tu­nity to come up with so­lu­tions to that prob­lem. We need, of course, to se­cure the point-of-sale ma­chines and it is a process. Al­ready, the up­take of told point-of-sale ma­chines been phe­nom­e­nal.”

He was re­spond­ing to Glen No­rah leg­is­la­tor Mr Web­ster Maon­dera on Gov­ern­ment pol­icy re­gard­ing the pay­ments done to Gov­ern­ment de­part­ments as most de­part­ments want ser­vice seek­ers to pay cash up­front in­stead of us­ing pointof-sale ma­chines.

On the progress made in p r i nt i n g has bond notes and their in­tro­duc­tion, Min­is­ter Chi­na­masa said the Re­serve Bank of Zimbabwe was fi­nal­is­ing the sign­ing of a tri­par­tite agree­ment with the African Ex­port/Im­port Bank (Afrex­im­bank) and bond notes print­ers ahead of the in­tro­duc­tion of bond notes in Oc­to­ber this year. He as­sured the na­tion that the guar­an­tee fa­cil­ity of bond notes would not ex­ceed t h e US$200 mil­lion guar­an­teed by Afrex­im­bank since the re­gional bank had a rep­u­ta­tion to pro­tect.

“The US$200 mil­lion is a guar­an­tee fa­cil­ity. The bond notes are com­ing to play a twofold pur­pose, as an ex­port bonus scheme but more im­por­tantly to stop leak­ages of US$. The way things are, if we brought in $2 bil­lion to­day, tomorrow it will be gone.

“That is what I think we need to un­der­stand. Be­cause of its ap­pre­ci­a­tion, ev­ery­body is look­ing for United States dol­lars. They will find ways to come and mop up, siphon and fish out our US$. That is the rea­son also why we are com­ing in with the bond notes”.

Gov­ern­ment is putting in place mea­sures to boost ex­ports as the ma­jor for­eign ex­change earner through var­i­ous pro­duc­tion and ex­port in­cen­tives.

These in­clude the five per­cent ex­port in­cen­tive scheme and other sup­port to gold pro­duc­ers to boost the economy.

Min­is­ter Chi­na­masa said other mea­sures in­clude im­ple­ment­ing the in­ter­na­tional fi­nan­cial in­sti­tu­tions (In­ter­na­tional Mon­e­tary Fund, World Bank and African De­vel­op­ment Bank) Ar­rears Clear­ance Pro­gramme to un­lock more ex­ter­nal fund­ing and low­er­ing bank lend­ing rates from as high as 35 per­cent to cur­rent lev­els of 6-15 per­cent.

He said these mea­sures and in­cen­tives to boost ex­ports are pri­mar­ily aimed at top ex­port earn­ers of gold (par­tic­u­larly the small scale pro­duc­ers) and to­bacco grow­ers.

Min­is­ter Patrick Chi­na­masa

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