Source: ‘Importing cash not one-day process’ | The Herald May 12, 2016
THE Reserve Bank of Zimbabwe governor Dr John Mangudya has said that international banking regulations dictate that limited amounts of cash are imported at any given time and just like individual depositors had a maximum daily withdrawal, banks were also subjected to the same by correspondent banks.Speaking at the Zimbabwe National Chamber of Commerce dialogue on the cash situation yesterday, both Dr Mangudya and Bankers Association of Zimbabwe president Dr Charity Jinya acknowledged that importing cash was not an overnight process as banks were subjected to Customer Due Diligence (CDD) from their correspondent banks.
A correspondent bank is a financial institution that provides services on behalf of another, equal or unequal, financial institution.
“People should understand that there are limitations in importing cash. For instance,if you import cash worth $10 million a month, you just cannot increase that amount.
“Those countries where we import cash do their CDD meaning that if you change the import size they will raise questions especially in light of Money Laundering regulations,” said Dr Mangudya.
Dr Jinya also added that questions would be raised internationally if banks continue importing more cash than they would normally require.
The RBZ this week injected $15 million into the market to ease the cash crisis but Dr Mangudya said the cash shortages are likely to resurface by today as pensioners start receiving their pay outs.
Dr Mangudya, however, bemoaned the rate at which the financial services sector is losing funds through externalisation.
“There is too much externalisation in this economy. So even if we import, that money is not coming back into the system. These unscrupulous businesspeople are taking money. We are feeding the looters.
“Lets not create a Sodom and Gomorrah of foreign exchange and externalisation of funds in Zimbabwe. The situation is getting out of hand and I am seeing suspicious transactions every day,” said Dr Mangudya.
Meanwhile, Dr Mangudya moved to clarify the revisions to the foreign exchange control measures introduced last week.
In a statement on Tuesday, the central bank said it had revised the foreign exchange management measures it announced last week and at its January Monetary Policy Statement in recognition of what it says is the need to improve the ease of doing business.
According to the regulations, 50 percent of all new foreign exchange receipts from the export of goods and services denominated in US$ shall be transferred to the central bank immediately on receipt of the funds with the remaining funds credited into the exporter’s FCA in US$.
On receipt of the 50 percent export proceeds into its nostro account, the central bank shall immediately credit the same amount plus the 5 percent export incentive in US$ into the exporters RTGS account of the exporter.
“Accordingly, the requirement for the apportionment of 50 percent of foreign exchange receipts into 40 percent South African rands and 10 percent euro has been removed with immediate effect.”
Dr Mangudya said that review was only to standardise and match with the regulations which had been introduced in the tobacco and gold sectors.
“The revisions are more operational and administrative, not much has changed. They are meant to align everything with what is happening in tobacco and gold. We cannot have two systems; where we have different measures for tobacco and gold; so the measures will now be uniform.”
Dr Mangudya also said that the rand/euro conversion will now be administered by banks.
“The banks will administer the spread of currencies so as to minimise concentration on one currency. We realised that if we had converted on the exporters’ proceeds, it would be like a penalty to them yet they are the goose which lays the golden eggs.”
In addition to the foreign exchange priority list announced last week, the central bank also extended payment categories which shall be included on Priority One (High).
According to the new Priority One list, remittance of rental income from properties owned by non-resident Zimbabweans and foreigners who would have purchased property using funds originating from offshore and transferred through normal banking channels.
The list will also now include the remittance of pension income for non-resident Zimbabweans who formally emigrated from Zimbabwe and importation of packaging material not available in Zimbabwe
The central bank removed the 10 percent threshold on nostro account balances after they were reviewed in January from 5 percent. It also removed the 15 percent threshold on cash holdings by banks.
The statement also said that Money Transfer Agencies or authorised dealers with limited authority (ADLA) who make cash withdrawals for the purposes of paying Diaspora remittances are not restricted by cash withdrawal limits.
“However, authorised dealers are reminded to exercise the application of the Know Your Customer and CDD in disbursing cash to these entities.”
COMMENTS
I am curious how much of the $15 million imported recently went to fund Mugabe’s travel to Ugunda this week. I think the public would be interested in how was used for this government funded travel.
The RBZ Guv is Mugabe and Scoones’ official Misrepresentation Mujiba. Come what may – Mugabe and Scones want to hoodwink the people of the world to believe that they are doing a wonderful job with Land Reform and the Economy. The main thing with such a National Lie is that they need to tell a really big one. The issues around why Zanu cannot give people their money need to be lied about in a really powerful and professional manner. The smarter the pin striped suit and the more eloquent the speaker the better. The last round saw the RBZ Guv come out with a book about the Casino Clown Economy, really flashy suits, and a PhD in printing money to steal from the people. It was as professional and clinical as the Gukuruhundi Genocide, the murder of farmers and their workers in the Third Chimuremga, the purge on the Judiciary, the looting in the Congo, the printing of the ama trillions of Zimbabwe dollars, the rorting of the War Veterans Disability Pension in the 80’s, the looting of Kondozi Farm, the looting of the Zapu Companies in the 80’s, and the closing down of the SADC Tribunal that Bob set up in the first place. One thing I recall is that some of the Zanu politicians and military were given 90% disability pensions – people may be forgiven for thinking that this was perhaps for mental disability not physical disability – based on their political performance over the lat 36 years?
This brings to mind the famous quote by the infamous Joseph Goebbels who said: ““If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.” Sounds like history repeating itself.
WHAT A BUSINESS TO Be IN—IMPORTING cash!!!! WHAT AN ASTUTE ENTREPRENEUR! INNOVATIVE AND CREATIVE FAKE PHD HOLDERS! !!!!
You may rig the elections but the economy is a different game altogether. It needs energetic, pragmatic and honest people. It needs leaders as opposed to rulers. They just need to resign for the people’s sake. They know they didn’t win any elections since 2 000 A.D. The problem of legitimacy will not be wished away. It is fortunate that the Zimbabweans are peaceful folk. This has gone beyond what is acceptable. The rulers have taken the people for granted for too long. They say the economy is improving when in reality the opposite is true. We are simply a province of South Africa or China with nothing we manufacture. Cash goes to where goods originate. Bond notes will not help in securing goods and settling foreign bills. Money should be used everywhere not localized. Please resign and go and look after your grandchildren. You are past the sell by date.