One of the Zimbabwe’s leading banks, Standard Chartered, has cancelled automatic use of its Visa debit cards outside the country due to the “increasingly scarce foreign currency resources”.
BY TATIRA ZWINOIRA
The bank yesterday said the decision was arrived at to ensure the best use of the increasingly scarce foreign currency, which is disbursed in line with the priority list issued by the Reserve Bank of Zimbabwe (RBZ), when available.
It said the use of the Visa card would now be granted through application for “special consideration prior to travel”.
“We regret to advise that we have cancelled the automatic use of your Visa debit card outside Zimbabwe with immediate effect,” Standard Chartered said.
“However, clients, who wish to use their cards outside Zimbabwe, may still apply for special consideration prior to travel.”
Clients, who want to use the cards outside Zimbabwe, will now be required to apply for the special consideration at least 72 hours before departure.
Clients would be expected to provide a travel itinerary and expected expenses to be incurred while travelling outside the country at any branch or via email with their applications.
Consideration will be dependent on the priority list guidelines on external payments by the RBZ, it said.
FBC also suspended the use of its MasterCard outside the country, but directed clients to use a prepaid one.
In May, the central bank came up with an import priority list for the efficient use of the scarce foreign exchange.
Under the revised list, top priority is given to the importation of cash and raw materials.
RBZ is struggling to adhere to the list due to the shortage of foreign exchange, resulting in companies struggling to pay for raw materials.
The dire forex situation in the country was exposed, when it was revealed recently by the RBZ that between August and December 2016, only $370 million was redistributed through the normal banking channels to production companies out of the $2 billion earned.
Financial expert, Persistence Gwanyanya said nostro accounts, which fund Visa cards, have been low due to depressed exports.
“I think we are beginning to see a difference between real time gross settlement (RTGS) money and nostro accounts,” he said.
“When you use a Visa card, they have to be funded by nostro accounts, which are quite low as the funding mechanisms for these accounts have dried up since our exports are low.”
A nostro account refers to an account that a bank holds in a foreign currency in another bank. As such, exports are the biggest source of foreign currency in the country.
Gwanyanya said RTGS money was becoming “the new Zimbabwean dollar”, as it could only be used locally.
RBZ governor, John Mangudya is on record saying the continued use of these cards was contributing to the challenges in adequately allocating foreign exchange funds, as they were not going back into productivity.