Reserve Bank of Zimbabwe (RBZ) governor John Mangudya has ordered banks to settle transactions outside the public glare as he cracks the whip on the sector amid revelations some banks were refusing clients to withdraw cash from their foreign currency accounts (FCAs) Over the past months, banks have been telling customers that they can only withdraw money if a cash deposit has been made into their accounts This has forced customers to liquidate their FCA balances into local currency as the money would have been stuck in their accounts “Financial integrity means that banks settle transactions outside the public glare
Don’t contaminate banking with politics,” Mangudya told a post-budget meeting this week “You do not need to settle offshore It is settled domestically but given value as a back office transaction Settlement is not a negotiating tactic where a customer of a bank is told that there is no money
That is not banking.”
Mangudya said the cash is there in the bank, the “money is in the nostro” Statistics from RBZ showed banks were holding FCA balances of nearly US$1bn as at October 31, made up of cash at bank (US$393,265,049) and nostro balances of US$573,101,628 In the same period last year total FCA balances were US$725,645,136 made up of cash at the bank (US$155,247,214) and nostro balances of US$570,397,922 Bankers who spoke toBusiness Timessaid there has been a divide in the banking in which the international banks would prefer to do settlement among themselves
Company executives said they have been struggling to use money in their FCAs as banks gave all sorts of excuses The settlement gridlock has seen some buying the money in the FCAs for a 10% fee It also comes as ethanol producer GreenFuel has told customers to make physical cash deposits into its account or a transfer accompanied by a letter that value transferred to its accounts would be honoured In a letter to customers, GreenFuel said its bankers were refusing to honour “our payments as they are insisting that we should get value first from your respective banks that would have processed transfers” to its accounts at Ecobank, CBZ and BancABC
“Going forward, please note that we will not release product unless a cash deposit is done to our accounts in physical cash or the transfer is accompanied by a letter from your bankers that value has been transferred to our bank and they can honour the payments,” wrote GreenFuel’s Percy Daka in a letter dated August 14 Bankers who spoke toBusiness Timessaid the central bank “didn’t think properly on the domestic nostro It was complicated by civil servants and this is why they wanted their money,” the banker said Source: Business Times
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Source: Businesstimes
