US$10 000 cap for cash in hand

Individuals and companies in Zimbabwe could soon be allowed to keep no more than US$10 000 in cash to boost liquidity and embrace international banking practices.

The Bank Use Promotion Act and related anti-money laundering laws are already being fine-tuned to bring these and other measures into force.

The Sunday Mail understands that the Reserve Bank of Zimbabwe has drafted the proposal and now awaits further direction from State principals.

Under the envisaged dispensation, individuals and businesses will hold US$10 000 and below at any given time without questions asked, with any surplus subject to immediate banking.

Companies will still be required to deposit daily takings at the close of business.

Presently, the Bank Use Promotion Act does not impose a maximum quantum on cash in hand.

In an interview with The Sunday Mail last week, RBZ Governor Dr John Mangudya said: “At the moment, there is no law regarding how much an individual can have in their possession, but that is what we are proposing. This is in line with best international practices around the globe.

“Once that money is brought back, we are confident cash will improve. We are saying individuals should not have money exceeding US$10 000 in their possession at any given time. We want people, especially businesspeople, to develop a culture of banking, which will help with cash circulation.”

Dr Mangudya said the RBZ is stepping up efforts to get externalised funds back into the country, with repatriation modalities now complete.

“We want to conduct a simple and transparent exercise so that members of the public will respond positively to our call. We are going to distribute forms to all banks across the country starting this week, which individuals or companies will use during the exercise.

“The forms will help individuals and companies that would want to partake in the exercise, showing them how to go about the whole exercise. We want to instill confidence (in the market) so that everyone wishes to partake in the exercise.

“We are also calling upon those who legally expatriated money, or might have bought assets using that money, to declare the money and assets for financial transparency. The assets will be an investment to the country under the RBZ at the prevailing rate of 7 percent per annum.”

Zimbabwe has been grappling with cash shortages since 2016, with authorities citing massive cash hoarding, money laundering and externalisation.

Statistics show that roughly US$3 billion was externalised between 2015 and 2017 to Mauritius, Botswana and the Far East.

It is believed that at least US$1,8 billion of the sum was illegally spirited away while the balance was expatriated via management, service and technical fees as well as royalties.

The RBZ estimates that on average, Zimbabwe lost US$150 million to illicit financial flows every month in 2015.

President Emmerson Mnangagwa extended a three-month moratorium for individuals and corporates that externalised funds or assets to repatriate them.

 

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  • Jonso

    So, are you going to be searching all houses in Zimbabwe?

  • JR Wezheve

    Dear Mr Governor
    I hope i find you well during this festive preriod. We are all facing the same cash challenges, i know you have access to some cash, but who cares, mbudzi inofurira payakasungirwa.
    Now, why am i writing to you..this is in relation to the maximum cash holding, and the expatriation of funds. In this new dispensation, i had hoped the use of fear and threats is now over, and we were supposed to be honest with each other, telling as it is, no more bookish truthm, but the real truth, nothing else but the truth.
    Why are people externalising, or hoarding cash? Few reasons come to mind, 1, no confidence in the banking system, 2, no access to the cash when they want it, 3, want to preserve their cash, 4 no interest from bank, 5 bank charges when you keep the money in local banks, 6 no assurance of getting the USD if you keep it in local banks, no separation of bond vs real usd..7 depreciation of the local currency if you keep the money in the banks, 8 bank charges when you transact on line 9 different tier prices when buying using the different forms of payments in zimbabwe
    these are some of the few reasons, why people are preferring to hold cash, and expatriating usd and keeping cash under our pillows…so what are the solutions
    1. Confidence, like Trust, is earned, you do not demand confidence from the public, but you earn it, things like who is the finance Minister, Biti didnt have the magic wand, but people had the confidence in him, check the bank balances during his reign as the Minister of Finance…so ask the executive to appoint a Minister whom the people have confidence in
    2. Separate the USD and BOnd accounts. Truth be said, Bond and USD are not one and the same thing, its not 1=1, their values are differrent. encourage those that earn USD to keep their money in the banking system by preserving the USD values, allow the opening of FCA, and allow them to operate as such. If i know that 2 years from now, i will still access my $20, why would i keep it under the pillow.
    3. Discourgae use of cash..By havung the balances earn interest, both the bond and usd account can interest. Cash withdrawals can have punitive charges, with bank depositing being free. Reduce bank charges on swiping, give incentives for people to swipe, have swipe discounts.
    4allow the Bond to flourish…Bond note is the ZWD, let it flourish, print it, not what you are doing saying we wont print more Bond, yet you are pumping the system with transfer bonds, there is no difference with the impact of printing and the RTGS bond…rather have the cash, but control the government spending, which is the major driver of infation in Zimbabwe..
    for now these 4 maeasures m though simplistic, we can work with them, I hope Zimbos will add a few to keep Zibabwe working again. We will accept criticism and slolutions

  • Tengenenge

    This anti-business “command” thinking is simply unbelievable in the new Zimbabwe dispensation…..At best, it is just scaring away any serious investor, at worst, it is actually undermining the intend , effort and authority of the new President , so the Sunday Mail editor and RBZ governor have clear cases to answer.

  • muti

    I wonder if the reserve bank personnel do no benefit from the rot.

  • JR Wezheve

    thank you for the feedback and engagement, this was my thrust, so that we can talk and map the way forward..my bottom line, lets not make criminals out of our citizens, address the root cause for people’s behaviour. Why are we putting our hard earned cash under our pillows, there lies the solution. Give me assurance, give me interest, but dont threaten me

  • silungisn

    All employees must paid via their Bank Accounts….to reduce Armed Robberies rampant Countrywide…..Companies in keeping Huge sums of money they risked to be butchered by armed robbers….