Minister Patrick Chinamasa
Takunda Maodza Harare Bureau—
THE Reserve Bank of Zimbabwe has launched an operation targeted at assessing banking trends by high cash generators like wholesalers, retailers, mobile phone companies and fuel dealers amid revelations cash deposits fell by an average 40 percent last month. The operation by the RBZ is part of a cocktail of measures aimed at arresting the current cash shortages.
This was revealed by the Minister of Finance and Economic Development, Cde Patrick Chinamasa, in his report to the National Consultative Assembly on the implementation of the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim-Asset).
The decision by the RBZ is in line with Section 11 of the Bank Use Promotion Act.
The Act reads: “Every trader, and parastatal shall, unless it has good cause for not doing so, deposit in an account with a financial institution, no later than the close of normal business hours on the day following that on which the cash is received or on the next banking day, cash that is surplus to the requirement of the trader.”
The RBZ operation started early this month.
“The RBZ’s Financial Intelligence Unit invoked Section 6 of the Bank Use Promotion Act (Chapter 24:24), and has launched an operation targeted at assessing banking trends by high cash generators that include wholesalers, retailers, mobile phone companies, and fuel dealers. The first phase of this operation started on Friday the 3rd of June 2016,” said Cde Chinamasa.
The RBZ has also been closely monitoring cash deposits patterns. “RBZ had been monitoring cash deposit trends within various banks, where it was generally noted that cash deposits had declined by an average of 40 percent during the month of May 2016,” said Cde Chinamasa.
He indicated there have been reports of illicit cash deals on the market. “There are reports which alleged that some players were selling cash, engaged in illicit deals, and were not depositing cash as required in terms of Section 11 of the Bank Use Promotion Act,” added Cde Chinamasa.
He highlighted other interventions the government was implementing to address liquidity challenges. These include Foreign Exchange Stabilisation and Export Incentive Measures, promoting the use of banks and domestic resource mobilisation. On Foreign Exchange Stabilisation and Export Incentive Measures, Cde Chinamasa said there was a significant rise in the use of plastic money.
The number of Point of Sales machines has increased sharply from 4,258 in 2012 to 17,448 as of April 2016. The increase in POS machines partly follows a directive by Treasury via circular No 7 on May 30, 2016, instructing ministries, government departments, local authorities and parastatals to introduce POS machines.
Cde Chinamasa said consultations on reducing charges and fees on the use of POS machines, Real Time Gross Settlement (RTGS) and mobile banking platforms, were underway.
There have been concerns over high bank charges since dollarisation in 2009 and the public outcry grew louder with the current cash shortages as more Zimbabweans turned to plastic money.
The average charge on an RTGS transaction is $10 while withdrawal fees are on average at $3 in banking halls and $2 – $2.50 for withdrawals done at ATMs. ZIPIT/POS fees are as high as $10 for a $500 transaction.
This is over and above accounts maintenance fees of about $12 per month. “The Domestic Resource Mobilisation entails harnessing financial resources from the local sources through initiatives such as – taxes, savings, and plugging leakages throughout the economy, among others,” said Cde Chinamasa.
He said the government was aware of challenges facing the country’s taxation system like corruption, inefficiencies, illicit financial flows and declining tax base due to de-industrialisation and growing informal sector activities as well as relatively high effective tax rates.
Cde Chinamasa said Treasury had since given the Zimbabwe Revenue Authority board the mandate to increase the tax base, automate the tax collection system and to combat corruption. The report by Cde Chinamasa touches on various other economic essentials expected to address the current economic situation.