Cash shortages: Banks blame government

Source: Cash shortages: Banks blame government– NewZimbabwe 31/05/2016

LENDERS and the central bank have blamed a shortage of cash notes in the country on money laundering, gold smuggling and a decision by the government to spread salary payments to civil servants over the month.

Banks in the southern African country will have to limit the amount of cash they supply to customers to cope with the continuing crisis, Barclays Zimbabwe Ltd. Managing Director George Guvamatanga said Tuesday at a conference in Harare, the capital. “I think weekly withdrawals of $500 will be adequate.”

Steward Bank Chief Executive Officer Lance Mambondiani said banks needed to make charges on withdrawals “more punitive.”

Zimbabwe, with no currency of its own, uses mainly dollars, with the euro and South African rand among banknotes that are also legal tender. The central bank will introduce $200 million of what it calls bond notes in October to counter the cash shortage, printed in Germany and denominated in dollars.

Capital flight, money laundering and rising imports have forced the central bank to double its purchases of dollars, Governor John Mangudya told the conference. “Where we used to import $20 million in notes a month, now we’re importing $40 million,” he said. “One of the biggest crimes is money laundering, but there’s also capital flight, with money going out in wire transfers and carried physically by people crossing borders.”

The government now staggers the payment of civil-servant salaries, which is partly why customers line up at banks more often to make withdrawals, Mangudya said.

“Almost every day is payday, which means there are queues every day,” he said. “In the past three days alone, government has spent $100 million on salaries.”

 

COMMENTS

WORDPRESS: 8
  • comment-avatar

    mugabe and his cronies took the us$ to singapore ndosaka there are none left.
    now he will give bond notes to the povo.

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    gwirikwiti 6 years ago

    These are not solutions because reducing the minimum withdrawal does not guarantee redepositing of the money back.

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    What has caused the capital (and human resource) flight and what has caused the government to struggle with or spread out salaries? Why have we become a nation of vendors and net importers? Why are companies closing down and why is government’s tax base ever shrinking? Why are we failing to attract FDI when compared to our regional and global neighbours?

    Sad to see an educated man in such a highly responsible job pulling wool over our eyes by blaming symptoms and unable, for reasons of fear and job protection, to call a spade a spade.

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    Mazano Rewayi 6 years ago

    This is what happens when a nation allows those with no knowledge nor skill to masquerade as leaders. When one tries to control what they do not understand disaster is inevitable. Our history since 1990 has clearly demonstrated that when it comes to financial matters (and pretty much everything else except looting) the fellows “in charge” have no clue what they are doing. It’s time to give those in the know a chance. Anything short of a change of the guard will not solve our problems.

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    Hameno 6 years ago

    Steward Bank Chief Executive Officer Lance Mambondiani said banks needed to make charges on withdrawals “more punitive.” God forbid. Whats the rationale for this??? The guy thinks not.

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    muchadya izvozvo 6 years ago

    OK those bankers think they are clever,they themselves have access to limitless US dollars.Now the people gona show them that a bank without depositors in nothing .We shall never bank/deposit not even a single bond coin.Let the game begin

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    Mpisi 6 years ago

    Muchadya. – YES! The banks are complicit. Boycott the banks. They cannot be trusted!

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    Johann 6 years ago

    I See the failed ex chief of Barclays Bank who was forced to retire during the Sub Prime Mortgage Banking crisis which started in 2008 is trying to make headway in Africa. His current bank being Atlas Mara. I understand this individual is heading a drive to take over Barclays Africa. Yes I agree the banks are complicit with this fraud that the thieves within the current govt are attempting to carry out. These banks gave loans to zpf individuals without collateral . No doubt they have assisted in the laundering of the 15 Billion Diamond heist.