RBZ urged to scrap withdrawal limits
THE Bankers Association of Zimbabwe (BAZ) says the central bank should scrap withdrawal limits and allow financial institutions to determine the amounts that they give their clients depending on available cash.
Withdrawal limits have always been the norm in the market but they have become a bone of contention due to cash shortages that the country has experienced for about two years. The shortages forced Government to introduce “bond notes” which are officially of equal value to the United States dollar”, the main currency used for transactions in Zimbabwe since adoption of multiple foreign currency system in 2009.
Despite introduction of the bond notes, the shortages have however persisted and have been blamed on externalisation of the much sort after green back and low exports.
Withdrawal limits are pegged at $1 000 and $10 000 per day for individuals and corporates respectively but have gradually gone down to as little as $60 per individ- ual and $500 for a company depending the amounts that the banks have in their vaults. In some cases, clients are forced to walk away empty handed as banks claim they have run out of cash. But BAZ president, Dr Charity Jinya said the continued acknowledgment and use of the limits by the Reserve Bank created a “crisis of expectation.”
“We would rather have them (limits) removed so that each bank uses its knowledge of the client, their requirement and what is available on a day to day basis to issue it,” she said recently.
Dr Jinya said indications that bank notes had higher value than plastic money meant that the demand for cash would remain high.
“The market should be encouraged to make greater use of e-channels as opposed to making greater use of cash,” she said.
She said some banks had since introduced weekly withdrawal limits while others were not able to do so for a variety of reasons. Ideally, every bank would like to have weekly limits for technical reasons. It is taking time for some and for others, for liquidity reasons they may have difficulty (introducing weekly limits) but we would like to make sure our clients do not trek to banks every day,” she said.
Some banks have set the weekly withdrawal limits of $300. — New Ziana.