The Sunday Mail
Dr John Mangudya
The bank queues for cash have disappeared. I am surprised that media platforms, both mainstream and social, are not saying anything about the development. It seems we are only focused on negativities, which is retrogressive.People must understand that bank queues are not caused by lack of money, but there is a practical level in which a bank can serve its customers. There is a maximum number of people that can be served, say some banks can deal with 1 000 people per day.
It is not as simple as people think that when there are queues at the bank then there is a cash shortage. People should learn to spread their visits to the bank. The problem is that we are a society which is used to moving around with cash.
As soon as people get their salaries they want that money in hard cash, which is not necessary. As a country, we must learn to spread our money over a period of time and not withdraw all the money from the bank soon after being paid.
We must have a paradigm shift because the money will always be there instead of spending the whole day at the bank.
That is why we are promoting the use of plastic money rather than hard cash. We also want to promote production of goods and services for export.
Employers need to ensure that they are managing their employees so that we do not have a situation where the whole workforce spends working time at the bank.
People should learn to withdraw their money on a gradual basis because their money will be secure. Our banking sector is sound, there is no need to panic by withdrawing the last cent and putting unnecessary pressure on the banks. We must give our banks the space.
We are encouraging people to use plastic money and mobile banking. This is very critical because it reduces pressure on the hard cash. As the central bank, we have invested significant amount of money to improve our infrastructure.
We have released more than 30 000 point of sale machines, which is significant from the 9 000 we had by mid last year.
Sales for big shops, including service stations, have gone up to between 60 and 70 percent of all the transactions. Our electronic banking infrastructure is intact, but just like any other electronic gadgets, sometimes the system breaks down.
The delays in processing transactions is not about the card but service providers might have problems, just like any other system.
However, banks are working very hard to improve and this is work in progress. On the issue of providing POS machines to schools, I should point out we have registered significant progress.
What the Ministry of Primary and Secondary Education has done to encourage schools to use POS machines is safer, faster and convenient.
We are happy with what the Minister (of Primary and Secondary Education Lazarus Dokora) has done and we hope all other Government departments will follow suit.
We have also noticed over the past few months there has been significant increase in cash deposits of foreign currency, including bond notes, which is a sign of confidence the people have in our banking sector. We are happy about that.
The $5 notes will be unveiled at the appropriate time. Normally these are security issues, but they will be on the market during the first quarter around March.
I have heard that there are delays in Real Time Gross Settlements (RTGS) but this thing may be due to inter-banking systems. Let me give you an example, company X banks with a different bank from that of its customers.
It means there is a switch but these things are settled every day at 10 or 11am in the morning. We have been told that RTGS are taking time to process, but that should not be the case. Some people believe the RTGS are taking long because the RBZ is not releasing the money.
Let me point out that the central bank is only in charge of about 30 percent of the foreign exchange in the market. That is what we control, the other 70 percent is disbursed through the banking sector, and therefore it is market driven.
Sometimes you wonder as a central bank why the 30 percent seem to have more impact than the 70 percent, people always say Reserve Bank is not giving us foreign currency yet 70 percent is in the market.
We want the market to be efficient in the distribution of foreign exchange so that at least the delays that firms are experiencing is managed.
As the central bank we encourage people to lodge complains when there are delays in processing RTGS and we are saying there is no need for service stations or shops to demand cash.
In any case service stations are the ones we give foreign currency more than anyone else yet they do not export. They don’t have a right to refuse any form of medium of exchange. People must report cases where they are asked to use foreign currency so that we deal with individual cases.
Globally foreign payments are a function of exports and foreign exchange earnings. Zimbabwe’s foreign currency earnings have been depressed because of commodity prices.
This is why we have put in place the export incentive scheme so that it encourages exporters to export more goods and services so that there is more foreign currency. Yes, we have been paying to the best of our ability as an economy.
Dr Mangudya is the Governor of The Reserve Bank of Zimbabwe. He shared these views with our reporter Tinashe Farawo.
