The Sunday Mail
THE Reserve Bank of Zimbabwe has directed money transfer agencies (MTAs) to deposit US$100 000 collateral while outwards remittances have been pegged at US$500 per day as the apex bank moves in to boost Diaspora inflows.
According to the central bank, MTAs will be allowed to send money out of the country with effect from April 1. Market watchers said the development is expected to boost MTAs revenue base as they leverage on their ability to offer instant money transfers.
This is also good news to the transacting public as they can now send money from Zimbabwe to other countries for use in medical emergencies, school fees, among other things.
In a notice on exchange control regulatory, operational and compliance framework for Authorised Dealers with Limited Authority (ADLA), RBZ Exchange Control director, Mr Morris Mpofu explained that the regulations should nurture competitive and secure international money transfer framework and protect consumers.
The regulations on MTAs are compliant to anti-money laundering and focus on combating terrorist financing.
“ADLA shall have minimum share capital and collateral security deposited with the Reserve bank of Zimbabwe (RBZ) as determined by the RBZ from time to time. Except with the authority of the Exchange Control, an ADLA shall not transfer, cede, hypothecate or encumber any part of the collateral security deposited with RBZ.
“The collateral security shall be refunded by the Reserve bank when an ADLA deregisters and after a declaration of external auditors that the ADLA does not owe its customers or business partners (local and international,” said Mr Mpofu.
The RBZ said the new exchange control framework for international person-to-person remittances shall be administered through the following three-tier system.
“Tier 1; shall pay collateral deposit of One Hundred Thousand United States Dollars (USD100, 000). For MTOs partnering with international MTOs (Franchise Services) proof of prefunding arrangements shall be submitted to Exchange Control for all Outward international remittances and MTOs using own systems (Unilateral Systems).
“Tier 2 shall ordinarily not pay collateral deposit. However, if the ADLA in Tier 2 use its own system or solely collects from customers for outward transfers as well as payout to beneficiaries, the ADLA shall pay a collateral deposit of Fifty Thousand United States Dollars (USD50,000), which shall be deposited with the Reserve Bank of Zimbabwe,” added Mr Mpofu.
He further explained that MTAs will not be allowed a daily float of over US$50 000 per branch and must observe the daily, monthly and yearly limit for the sender of US$500, US$5 000 and US$20 000 respectively.
The new regulations are part of the RBZ’s move to tighten rules governing sending and receiving money that made it practically impossible to do so dating back to 2004.
Licensing arrangements under the Exchange Control (Money Transfer Agency Order), Statutory Instrument 77 of 2004 and the accompanying Exchange Control (Money Transfer Agencies Amendment) Order, 2004 (No. 1) saw measures that were meant to influence the administrative, operational and legal framework for the transfer of foreign currency, especially from the Diaspora.
Outbound money transfers were banned in order to curb leakages of foreign currency.
The Bank Use Promotion and Suppression of Money Laundering Act (Chapter 24:24) was subsequently promulgated in 2004.
The Zimbabwe Revenue Authority (Zimra) estimates that the country could be losing up to US$3 billion annually due to illegal cash transactions across borders following the adoption of the multi-currency regime in 2009.
According to RBZ, total remittances from the Diaspora amounted to US$840 million in 2014, compared to US$790 million realised in 2013.
According to a Finscope Consumer Survey, remittances made via family and friends account for 58 percent of all transfers, while 17,5 percent use other informal channels.
First National Bank of South Africa last year claimed that research indicated that Zimbabweans in that country remit about R6,7 billion or US$620 million a year, with a fifth of the amount spent on transfer costs.
By the end of 2006, Zimbabwe had more than 16 MTAs — Fedex, POSB, Stanchart, NMB Bank, TransAfrik, Dollarway, CABS, Stanbic, ZIMPOST, I and F, Pacific, Banfords, CBZ and Parlovan.
