Banks that do not flag ‘dubious transactions’ could lose licences: RBZ

– Banks should flag suspicious transaction or risk losing their operating licences, Reserve Bank of Zimbabwe (RBZ) governor Dr John Mangudya has said.

He was addressing a Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) engagement this morning.

“Customers are good, but at the same time customers are dangerous. As financial institutions you need to be able to know the source of wealth of your customers…you need to know the source of funds of your customers.

“If you are a financial services player and you do not know the source of funds you are accepting, you are taking very high risks. If John Mangudya works for the RBZ and banks with Bank X, you know exactly that on the 25th of the month the salary goes through the account…you know what the money is used for…you know the trend. If you see tomorrow $1 million is thrown into his account, that’s a suspicious transaction.

“You are taking risk as an institution; such institutions could lose their licences. It’s not in Zimbabwe only, it’s a global trend,” he said.

The RBZ’s push for close monitoring of bank clients’ accounts is part of broader global crackdown on money laundering and terrorist financing.

“Institutions have to transform to the ‘new normal’. The new normal is that after the global financial crisis there are now many risks that the banking sector has to deal with, from cybercrime to money-laundering among others,” said Dr Mangudya.

He added that the Government had changed the Banking Act to put it in line with global trends.

MEFMI executive director Dr Caleb Fundanga concurred with the RBZ governor on the fast shifting landscape in the wider financial services sector milieu, adding that continued renewal of training of employees and management in that sector is particularly important.

“This is the reason why we always emphasize that even if you have a suitcase of degrees, it is important to renew your training, otherwise you could find yourself redundant,” he said.

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