THE announcement by the Reserve Bank of Zimbabwe (RBZ) on Monday that it was banning all cash-in, cash-out and cash-back transactions, in an attempt to preserve the value of electronic money is definitely a great step in the right direction.
Low-income earners, the bulk of whom require some cash to commute to work and even travel long distances were being creamed off of their hard earned cash by mainly EcoCash agents who were demanding up to 60 percent in exchange for cash.
Those with relatives and or/ friends working in retail especially supermarkets and service stations, were also taking advantage of their proximity to cash to get physical cash at no cost and go ahead to sell it at extortionate rates on the parallel market.
The deplorable practice had resulted in cash purchases becoming way cheaper than those done using electronic payments methods. This development caused people to stampede at banking halls and EcoCash agents to access physical cash.
RBZ Director Financial Markets, National Payment Systems Mr Josephat Mutepfa said the apex bank was aware that some economic agents were “engaging in illegal activities abusing the cash-in, cash-out and cash-back facilities thereby compromising the public interest objectives of national payment systems in the economy”.
But while the move by the central bank to contain arbitrage in the market is laudable, neutrals still believe that RBZ can do better by harmonising the measures it feels are essential in plugging all loopholes being exploited by economic saboteurs.
The idea of introducing weekly regulations is not ideal in a market that clamours for policy consistency.
A piecemeal approach to dealing with this critical sector has the tendency of causing market paralysis as operators would prefer to wait until “all measures have been put in place”, so that they weigh if such measures meet their expectations.
Experts believe the bank should articulately play its supervisory role of banks to ensure market stability, as any lax approach to managing banks will ultimately chaos. In this case, the buck squarely stops with the Financial Intelligence Unit (FIU).
The FIU, an arm of the RBZ, needs to demonstrate that its “intelligence” does not just exist in name, but indeed.
If the FIU was that intelligent, it should have busted the economic saboteurs who have been playing Russian roulette with the peoples’ lives over a long time.
The RBZ needs to monitor suspicious accounts involved in the movement of huge sums of money under unclear circumstances. More so, if the officials in the FIU were that smart, they should know the prevailing rate for foreign currency at any given time so that they block any transactions that suggest funds are being moved to pay for forex.
The FIU must play its role of busting suspicious accounts and swiftly bring the perpetrators to book for the stability of the market.
But beyond the almost 10 accounts that were suspended recently, nothing decisive has happened in a long time, even during the 2008 era when the phenomenon of “burning money” started.
Suspicions that some individuals in the FIU were working in cahoots with some characters in the banking sector to manipulate the market appear to hold water under the circumstances of apparent disinterest by the department to clampdown on illicit financial transactions.
For instance, banks get daily cash allocations from the RBZ, but depositors spend the better part of the day languishing in the sun outside banking halls as bank managers maintain a vice grip on the cash so that they distribute it among themselves when the bank closes.
Such malpractices should have been fished out by the FIU a long time ago as daily banking records would show the amount of money extended to Bank A, how much was disbursed and how much remains.
But sources suggest this supervision role was not being prudently done, leaving bank managers to freely channel most of their daily allocations from the RBZ to the black market.
There has not been a satisfactory response from the RBZ to questions why the parallel market always has brand new bond notes when citizens are accessing coins, at best.
We challenge the FIU to develop teeth and bite all individuals and companies that are engaging in untoward business practices that put the lives of citizens on the line.