Reserve Bank of Zimbabwe ‘warns against cash dealings

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya Monday warned some business entities and individuals (that) are reported to be selling cash, at a premium, against (electronic) transfers from the cash buyers’ accounts.

“Some cash-generating businesses, especially retailers and wholesalers, have not been banking all their cash receipts, as required under the Bank Use Promotion Act [Chapter 24:24],” said the RBZ in its statement.

Instead, they offer the cash to companies and individual, who would make RTGS or inter-account transfers of the equivalent amount, plus an agreed premium, into the cash vendor’s account.

Banks will be required to report all transactions suspected to involve selling or purchasing of cash.

The Central bank’s anti-money laundering unit will increase its monitoring.

As Zimbabwe’s banknote shortage intensifies, ahead of the twice deferred introduction of bond notes, the trade of electronic US$ for physical notes has increased, at a premium of as much as 20 percent.

To manage the bank note crisis, banks have continued to reduce cash withdrawal limits — on average, individual clients can hope to get $50 per day from the bank after standing in the line for hours, while companies can access up to $300 in most cases.

Although the use of electronic payment platforms such as point of sale machines or bank transfers has increased considerably, Zimbabwe’s largely informalised economy means the bulk of transactions are still on a physical cash basis.