Banks to prioritise importers over depositors

BANKERS Association of Zimbabwe (BAZ) vice-president Benefit Washaya says banks were still to decide whether they should continue importing cash to distribute to the depositors considering that the money was not coming back to the banks.

BY TATIRA ZWINOIRA

Washaya made the remarks at the Alpha Media Holdings Banks and Banking breakfast meeting in Harare yesterday, where he said an urgent solution was needed to deal with the cash shortages.

“Let me say of the ‘so-called cash shortages’ that banks and the authorities (the central bank) have pumped in enough money into this economy, enough cash. The cash is circulating somewhere. It is unfortunate that is not being banked, but the cash is there and this is fact. And, in terms of banks importing the United States dollar, something that we have always been doing since we went into a multi-currency, we now have to look at a situation where we say: what do we do?” he said.

“We have got cash and you give it to someone, then that cash never comes back into the formal system or do we leave the resources that are sitting in our nostro for those who want to import raw materials? These are some of the decisions which have to be made and it is obvious what makes sense.”

“We have said as a sector if as a customer you feel you do not want to keep your cash under the pillow, there is nothing that stops you from going to the bank saying ‘here is my $10 000, here is my money. When I want it, please give it to me back in United States dollars’,” he said.

Since last year, banks have adopted a strategy of deliberately not disbursing large sums of cash to clients while holding on to the foreign currency they have.

For example, in the central bank economic report for the week ending June 15, automated teller machines disbursed a total

$1 797 674 compared to $7,52 million released around the same time in 2017.

Banks are blaming customers for the drop in disbursements, as long bank queues have continued to grow.

Speaking at the same event, RBZ governor John Mangudya said: “What Ben said is very clear that what most of us are banking in the banks is not foreign currency, I mean let us call a spade a spade. The problem in Zimbabwe is that sometimes we do not say the truth. When we look at most of us in this room what you are calling that my money has gone to the bank you did not take there as foreign currency.”


He added: “If we get $330 million (exports) plus $100 million (diaspora remittances), that is $430 million (a month). We also get foreign currency from loans, say from Afreximbank and the PTA Bank (now the Trade and Development Bank) to bridge the gap because the balance of payments should always balance so it means you need to borrow offshore to make sure the books balance.

“Now, the books are balancing but the question is about distribution, the issue of viability to say what is the best way to distribute at a parity of one to one?”

Analysts say depositors have lost confidence in the formal banking system.

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8 Comments

  1. The problem is that these banks are importing USD notes in their larger denominations. A $10 or $50 US note is easy to sell on the streets or hide under one’s pillow. $1, $2 and $5 US notes have absolutely no black market value.

  2. Legalised Thievery

    There are no incentives to keep one’s money in the bank. If you bury US$1 000 in your yard and return to it after 5 years, you will find it all there. Not so if you bank it. Bank charges exceed interest. It is this thieving that is making banks disincentivised to contribute to the meaningful development of the country. They are supposed to loan money for industrial commercial and other productive activities and make their profits from the difference in the rate they give depositors and charge on loans.

  3. The money in our accounts is supposed to be backed by Forex. In the beginning, it did not magically appear in our accounts. I may not have put it in the as forex myself, but someone did.

    Everything was good and balanced.

    And then the RBZ decided to manufacture it’s own USD through TBs and the RTGS system.

  4. These Banks are to blame for the crisis, They crowd-out people by denying us access to our cash when they themselves are
    withdrawing hard currency without limits and channel it onto the streets. These are fake guys who preach what they don’t practice. People cannot have Confidence with Financial Institutions which are engineers of malpractices. Their Bank Charges are just an extortion. Trust/Confidence is built and cannot be demanded, these guys must make up their business minds up to the task & stop covering their failures by straining us.

  5. George Mushore

    The last time “TYSON” said kombis rake in 600,000.00 daily in Harare only. You can do your maths for the other centres and tell me one kombi that banks money. We have had people with brilliant transport projects that use cards. The authorities wont have it because “NDIVANAANI IVAVO”
    They say ma “CHINA” will bring us ma BHAZI. Saka isu vana vemuno toita vashandi chete?

  6. tinei ganyani

    Imagine ivo vari kumusoro kana vari confused kuzoti isusu tosara tiri chii. economic warfare irikunyanyiswa munyika muno. how can someone explain kuti US$ irikupiwa rate ne bond which is not money. politics dziri kunyanyisa munyika muno but politicians will never suffer only the man in the streets.

  7. Alfred Hungwe

    “What Ben said is very clear that what most of us are banking in the banks is not foreign currency, I mean let us call a spade a spade. The problem in Zimbabwe is that sometimes we do not say the truth.”

    With all due respect Dr Mangudya you can not talk of foreign currency in Zimbabwe as we do not have a currency of our own. we are in a multi currency era and the basket of currencies does not include any local currency. so what do you mean by saying WE DID NOT DEPOSIT FOREIGN CURRENCY in our bank accounts. i would prescribe a simple solution for the cash crisis to you sir, just flood the market with the USD and if you want to maintain the bond note make sure EVERYONE importer or not can be able to convert it to USD anytime at the 1:1 rate then the black market will disappear.

  8. The Banks are the major players in the black market system. They deny the depositors their cash (my bank, Barclays, only allows me to withdraw $30, in Bond only, per WEEK!), and they channel all forex to the black marketeers, change it at a 60% premium. The extra 60% is pure untaxed profit for the bank.

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