Zimbabwe banks dread bond notes

Local banks, which on the surface appear to be supporting the introduction of US$ 200 million worth of the new promissory currency bond notes into the market, fear a nightmare over accounting standard chaos and operational headaches.

This comes as bankers yesterday met Finance Minister Patrick Chinamasa over a series of issues affecting the sector, including the bond notes introduction in a few day's time.

Zimbabwe is reeling from a severe liquidity crunch which has worsened markedly since the announcement of bond notes in May. While banks in the public seem to support the measure, behind the scenes they are skeptical as they dread this might wreak havoc within financial system and even worsen the crisis.

Meanwhile, local banks are configuring their automated teller machines to dispense both the US dollar and the bond notes, Reserve Bank of Zimbabwe Governor Dr John Mangudya said.

Alternatively, the banks may have separate ATM machines, dispensing the US dollar and the bond notes expected to be introduced in the next few days.

Dr Mangudya is on record that no one will be forced to accept the bond notes and such an arrangement would give the banking public an option either to withdraw their money in US dollars or bond notes.

"When I met ambassadors they said the best way - as done elsewhere - is to have two ATMs, one for bond notes and another one for US dollars," he said in an interview on the sidelines of the CZI 2016 manufacturing sector survey report launch on Wednesday.

"It is a very good idea. People are rational, if there is no queue on one ATM, then they can go to the other and get their money.

"We have asked banks to look at it. We want to maintain the multi-currency system," said Dr Mangudya.

He said banks were forthcoming in implementing the plan, which is also expected to bring convenience to the banking public.

"The banks are happy, some are already doing that, for instance at Barclays they can give you rands or US dollar but people do not want rands, yet they are in the system," said Dr Mangudya.

Meanwhile, the RBZ will unveil specimen for the bond notes just before their release to minimise the risk of counterfeits notes.

"You do not put in the paper today then release them at the end of the month. If you do that then you give room for counterfeits.

"We do not want people to be duped. This is the standard for any note which is given out throughout the world so that you minimise counterfeits," said Dr Mangudya.

The bond notes are being introduced into the economy as an incentive for exporters. It is also envisaged they will help ease the biting cash shortages that have been prevailing in the country since early this year.