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Mangudya warns bankers

by Staff reporter
21 Jul 2017 at 08:48hrs | Views
THE Reserve Bank of Zimbabwe (RBZ) has warned bankers against conniving with cash dealers, as reports of bank officials getting involved in the parallel market continue to rise.

RBZ governor, John Mangudya told reporters on Tuesday at the official opening of the Grant Thornton Zimbabwe headquarters that they were hearing increasing reports of bankers getting involved in illicit deals.

His remarks come at a time banks are revising cash withdrawals downwards to as low as $20 daily.

"As we have been reading in the newspapers, there are some bankers that are also engaging in that type of practice [cash dealing]," Mangudya said.

"That is a poor banking practice and it is not acceptable in Zimbabwe. It is a bad business practice, bad banking and abuse of office and if a banker is doing that it is not acceptable," he said.

"As central bank, we have evoked our Bank Use Promotion Act which compels all traders to bank their surplus cash and also on our part as a central bank, we are trying to encourage the use of plastic money.

"When we are using foreign exchange, we are using foreign exchange as our medium of exchange right? But we need to earn foreign currency, we need to make it.

"So here we do not make foreign currency. Here, we are using foreign currency that we do not make. Zimbabwe has no access to foreign currency as you are aware.
It is limited yet we are using foreign currency as a medium of exchange. We need, therefore, to earn more foreign exchange for this economy to continue utilising foreign exchange."

A recent snap survey conducted by NewsDay of cash dealers at Eastgate Mall in the central business district confirmed that cash dealers are receiving higher amounts of cash from bankers.

Some of the amounts they were receiving were as high as US$5 000, R50 000 and $2 000 in bond notes.

Cash dealers said they were receiving smaller amounts of cash from depositors.

NewsDay observed that an average three people approach cash dealers hourly seeking to buy cash through EcoCash and are willing to pay high premiums of between seven and 20% for bond notes or US dollars.

According to the RBZ, there should be about $800 million in cash circulating in the economy, but this was not the case due to market indiscipline.

Mangudya said Zimbabwe needed some structural reforms in terms of productivity, fiscal consolidation, building confidence in the market and a change in government expenditure.

Source - newsday