Zimbabwe banks ready to issue out new US dollar bills

Zimbabwe Banks are ready to issue out new US dollar bills to replace old, dirty and defaced notes in circulation if the public and corporates deposit the money, the Bankers Association of Zimbabwe has said.

John Mushayavanhu the president of BAZ on Monday said this would make it easier for banks to facilitate repatriation of old notes to the Federal Reserve Bank of the United States and receive new bills.

"Old notes continue to be in circulation because people are not banking money so that the old notes can be repatriated and new notes are brought into circulation.

"The notes can be exchanged free of charge," Mr Mushayavanhu said.

He said people could simply walk into any bank and exchange their old bills.

This follows an outcry from the public that some shops, commuter omnibus crews and cellphone recharge card vendors were refusing to accept old and torn notes largely in US$1, US$2 and US$5 denominations.

Most of these notes are badly soiled, defaced, disintegrated, worn and torn because they change hands frequently.

Some of the notes are defaced through unintentional means such as fire, water and chemical damage.

Zimbabwe has over US$2,5 billion in circulation and most of the money is not finding its way to the banks as the majority of Zimbabweans have lost confidence in the banking sector.

Most of their savings were eroded just before dollarisation.

Employers Confederation of Zimbabwe administrator Mr John Mutukani said most businesses were operating on cash basis and it was difficult to bank money.

"What the business is getting is not enough to cover what they must pay for the day. So we cannot bank money because it's just hand-to-mouth survival," Mr Mutukani said.

The general public has also shunned banking cash and accuses banks of profiteering through high service charges.

There are huge amounts of money in circulation in the informal market, flea markets and some small businesses in the retail sector and the money is not banked.

However, banks have justified the high bank charges arguing that as financial institutions, they have lots of overheads to cover.

A manager at a local grocery shop, Mr William Tembo, said he had issued an order to his staff that they should accept all legal tender.

"We don't refuse any money except when it is counterfeit," Mr Tembo said.

However, in a survey most people accused shops, commuter omnibuses and airtime vendors of refusing to accept older notes.

"I went to a shop (name withheld) in the city centre and they refused to accept my slightly torn US$1 note saying the next person will not accept it. I argued that it was legal tender but they requested that I pay with a clean note," Mr Mike Ngoma of Glen View said.

Another disgruntled commuter said commuter omnibus crews were the main culprits.

"They tell you that they cannot accept the money you have given them because it's slightly old. But the same crew will give you change with older notes. This is unfair," the commuter from Kuwadzana said.

A commuter omnibus crew that was confronted by The Herald said: "We don't take old and defaced notes. This has caused problems for us."

It is illegal to purposely deface, mutilate, impair, diminish, falsify, scale or lighten any coins minted or "coined" in the United States of America.

The US Government will replace worn out or damaged money if three-fifths of it is still identifiable.

Two-fifths will earn the bearer half the face value; less than that gets nothing. Every year, the US Treasury handles over 30 000 claims of destroyed or badly damaged currency.