Zimbabwe Threatens Banks with Closure Over Money Transfer Delays

The Reserve Bank of Zimbabwe (RBZ), the country’s central bank, has issued a stern warning to commercial banks failing to complete daily transactions on the local money transfer system, and threatened to close any financial institutions caught short-changing customers.

RBZ governor Gideon Gono said Thursday night that some banks were deliberately delaying processing Real Time Gross Settlement (RTGS) electronic transfers to cover-up suspected mismanagement of depositors’ funds.

He said branches that failed to transmit funds by the end of the trading day as per customers’ instructions would be closed instantly.

Since late last year some transactions were taking up to10 days to clear instead of just a day. The anomalies were now forcing mostly companies who need to move huge volumes of cash each day to make transactions outside the formal banking system as the daily cash limit of five billion Zimbabwe dollars (about US$22.70) has proved too little owing to the country’s runaway inflation of about 165,000 percent.

The hyperinflationary conditions have seen prices of goods and services rising up to three times a day.

The RTGS system had remained clogged in recent days following the liberalization of the foreign exchange market by the central bank, which authorized banks, money transfer agencies and foreign exchange purchasing centers to buy hard currency on a willing seller-willing buyer basis.

Individuals and companies can now cash up to US$150 per day at their respective banks and may also source foreign exchange from the same.

Some clients with hard currency had however remained skeptical about the new exchange system, citing fears that they may struggle getting their money out of the bank due to the slow process and the prohibitive cash limits.

Source African Press Agency

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