So far 202 people have been arrested for rejecting dollars and labelling them “bond notes”, with 51 of them already brought to court, while five have been fined between $200 and $500.
The arrests follow the launch of “Operation accept Zimbabwe currency as legal tender” by police on June 26 when mischievous and paranoid reports starting appearing on social media platforms telling people that bond notes would soon be demonetised.
Some traders, believing anything they read on social media, started rejecting some notes while others, believing the categorical assurances by both fiscal and monetary authorities that all notes were good cash, are increasing sales as stashes of notes appear out of trunks belonging to the gullible and are hurriedly spent.
In a statement yesterday, national police spokesperson Assistant Commissioner Paul Nyathi warned traders and businesses that they risked being arrested if they reject any legal tender.
As far back as 2008, regulations were issued under the 2004 Bank Use Promotion and Suppression of Money Laundering Act making rejection of any legal tender a criminal offence.
“Members of the public and businesses are urged to comply with the law to promote the maintenance of law and order.”
Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya recently said Zimbabwe dollar notes inscribed “bond note” remained legal tender and should be accepted for all domestic transactions. This was backed up by statements from Finance and Economic Development Minister Prof Mthuli Ncube.
Legislation that reintroduced the local currency last year, explicitly states that bond notes constitute variations of the Zimbabwe dollar.
In any case, when bank notes are demonetised, there is a long period of notice while they still circulate, followed by another long period when they can still be banked if no longer circulated.
Part of the problem in Zimbabwe is that cash is hoarded, bought and sold without passing through a bank and so older notes become torn and worn. This is apparently what started the rumours.
Normally the tatty notes would have been taken out of circulation long before reaching that stage with banks routinely sending old and soiled notes to the Reserve Bank for destruction.