Banks fingered in US dol­lar scams

Chronicle (Zimbabwe) - - Front Page - Tawanda Musarurwa

MAR­KET in­dis­ci­pline in the lo­cal fi­nan­cial ser­vices sec­tor ne­ces­si­tated the sep­a­ra­tion of For­eign Cur­rency Ac­counts (FCAs) and real time gross set­tle­ment (RTGS) ac­counts, Fi­nance and Eco­nomic De­vel­op­ment Per­ma­nent Sec­re­tary Ge­orge Gu­va­matanga has said.

Ap­pear­ing be­fore the Par­lia­men­tary Port­fo­lio Com­mit­tee on Fi­nance and Eco­nomic De­vel­op­ment, Mr Gu­va­matanga said the sep­a­ra­tion of FCAs and RTGS ac­counts had be­come nec­es­sary as some banks had be­gun cheat­ing their clien­tele of part of their United States dol­lar sav­ings.

“The sep­a­ra­tion of FCA ac­counts and RTGS ac­counts was nec­es­sary as the sin­gu­lar sys­tem was now dis­ad­van­tag­ing those with ac­cess to free funds, such as non-gov­ern­men­tal or­gan­i­sa­tions, ex­porters and those who re­ceive money from the di­as­pora.

“Be­cause if you re­ceive US$200 you shouldn’t be forced to rush to spend it be­cause there is nowhere else to keep it or keep it un­der your pil­low be­cause there is no sep­a­ra­tion.

“So to pro­tect those with ac­cess to such funds, it was very im­por­tant to sep­a­rate so that there is no con­fu­sion and I know — I come from the bank­ing sec­tor that in the past if you re­ceived money from the di­as­pora or from what­ever source some banks would tell you that you can now ac­cess 70 per­cent of your money be­cause the Re­serve Bank said we should take the other 30 per­cent, which was not true,” he said.

“So there was an el­e­ment of mar­ket in­dis­ci­pline that was now start­ing to creep in and dis­cour­ag­ing those with ac­cess to US dol­lars from bring­ing it into the for­mal sys­tem and we were try­ing to ad­dress that mat­ter by say­ing let’s sep­a­rate the ac­counts un­der the multi-cur­rency sys­tem, which is still Govern­ment pol­icy as we speak.”

Ear­lier this month, the Re­serve Bank of Zim­babwe (RBZ) gave banks around two weeks to sep­a­rate the two ac­counts as part of mea­sures to pre­serve value for for­eign cur­rency earn­ers.

It was also largely ex­pected that the mea­sure will strengthen the multi-cur­rency sys­tem for fi­nan­cial and price sta­bil­ity and to in­crease in­flows of for­eign cur­rency.

The Govern­ment has also moved to en­sure that the FCAs are ring-fenced.

“Over and above the Nostro De­posit Pro­tec­tion Guar­an­tee from Afrex­im­bank, we are also re­in­forc­ing Nostro for­eign cur­rency ac­counts with a Statu­tory In­stru­ment to guar­an­tee that these are pri­vate de­posits, and nei­ther the Re­serve Bank nor Govern­ment has any ac­cess to them,” Fi­nance and Eco­nomic De­vel­op­ment Min­is­ter Mthuli Ncube said in a state­ment from In­done­sia ear­lier this month where he was at­tend­ing the World Bank and In­ter­na­tional Mone­tary Fund an­nual meet­ings.

Sep­a­ra­tion of FCA ac­counts and RTGS ac­counts also brought into ques­tion the pre­sumed equal­ity of the value of the US dol­lar and the lo­cal bond note, but Mr Gu­va­matanga main­tains that Govern­ment pol­icy on the US dol­lar-bond note/RTGS rate is 1:1.

“We are even look­ing at sev­eral mea­sures to strengthen the of­fi­cial 1:1 rate,” he said.

These mea­sures would be in ad­di­tion to the loan fa­cil­ity from Afrex­im­bank that was se­cured by the Govern­ment to guar­an­tee the 1:1 con­vert­ibil­ity value of RTGS bal­ances into the US dol­lar and avail­abil­ity of the green-back for Nostro for­eign cur­rency ac­counts.

On a re­lated mat­ter, Pres­i­dent Em­mer­son Mnan­gagwa yes­ter­day said the Govern­ment was work­ing hard to en­sure eco­nomic sta­bil­i­sa­tion, and that the multi-cur­rency sys­tem was here to stay.

ATAF was es­tab­lished by African rev­enue au­thor­i­ties in 2009, in or­der to im­prove the per­for­mance of tax ad­min­is­tra­tions in Africa. ATAF be­lieves that bet­ter tax ad­min­is­tra­tion will en­hance eco­nomic growth, in­crease ac­count­abil­ity of the state to its cit­i­zens, and more ef­fec­tively mo­bilise do­mes­tic re­sources.

Now in its ninth year of op­er­a­tion and head­quar­tered in Pre­to­ria, ATAF seeks to Im­prove the ca­pac­ity of African tax ad­min­is­tra­tions to achieve their rev­enue ob­jec­tives, ad­vance the role of tax­a­tion in African gov­er­nance and state build­ing, pro­vide a voice for African tax ad­min­is­tra­tions and de­velop and sup­port part­ner­ships be­tween African coun­tries and de­vel­op­ment part­ners.

Mr Ge­orge Gu­va­matanga

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