Cash shortages eases as companies heed RBZ directive
THE Reserve Bank of Zimbabwe has said cash deposits from companies into banks have gone up following a directive issued last week to compel companies to bank their proceeds in line with the Bank Use Promotion and Suppression of Money Laundering Act.
The RBZ last week assembled a crack team to compel all businesses to bank their money in line with a strategy to enhance cash circulation in the formal system, which is a requirement under the law.
In an interview on Friday, RBZ governor Dr John Mangudya said they had recorded significant increases in daily deposits by companies which he said would go a long way in easing the bank queues which had become the order of the day in most banks.
Although he could not give the figures on the increased deposits, he said the central bank will continue to monitor banking activities of companies to ensure they continue banking on a daily basis.
“According to the Bank Use Promotion and Suppression of Money Laundering Act it is a requirement that all businesses bank their cash at least by the following morning of their business day. Since we made our rounds in the past week I should, however, note that we have recorded an increase in daily deposits and it is because of this that we will have a decrease in the long bank queues as more money is now in circulation.
“It is not like we are fighting businesses but we are saying that they should allow money to be in circulation. If they keep money in their companies it goes on to affect the country’s economy as we will have to use a lot more money to import that money, therefore it is my call for all businesses to abide by the country’s laws and bank their money,” said Dr Mangudya.
Sunday News also observed that queues have become short while some banks which used to disburse $50 per day have increased to $200. Dr Mangudya said from the one week after announcing the directive, the bank has noted that unbanked businesses were partly to blame for constipated money circulation over the past couple of months.
“It is surprising that while we are importing between US$10 million and US$15 million every week, this money is stuck somewhere in the system because of companies that are not banking. I think these companies should further respect President Mugabe who has also spoken about these businesses that are not banking, the truth is that they are affecting our economy to a larger extent,” said Dr Mangudya.
Section 11 of the Bank Use Promotion and Suppression of Money Laundering Act (Chapter 24) requires all traders and parastatals to bank their money at the close of business. It reads, “(1) Every trader, and parastatal shall, unless it has good cause for not doing so, deposit in an account with a financial institution no later than the close of normal business hours on the day following that on which the cash is received or on the next banking day —
(a) cash that is surplus to the requirements of the trader or parastatal; or
(b) cash in excess of ten million dollars (or such other amount in excess of ten million dollars as the Minister may prescribe from time to time); whichever is the lesser amount.
(2) A trader or parastatal shall have the burden of proving, to the satisfaction of an inspector, police officer or any court, that it has good cause for not complying with subsection (1).”
Meanwhile, Dr Mangudya said the public should ignore statements that were being circulated in the social media alleging that RBZ was giving up on the introduction of bond notes. He said all official statements by either him or the RBZ were made through official channels and not circulated via faceless social media individuals.
Zimbabwe has been battling to end cash shortages that began in April on the back of illicit financial flows, a huge trade deficit and the lack of a savings culture. Bond notes worth US$200 million will be introduced around October to help ease the situation, although quick-win strategies are already being pursued, inclusive of the use of plastic money, with the RBZ revealing that they are engaging banks to see how bank charges on the use of plastic money and Point Of Sale points be reduced.