Banks fingered in US dollar scams

George Guvamatanga

Market indiscipline in the local financial services sector necessitated the separation of Foreign Currency Accounts (FCAs) and real time gross settlement (RTGS) accounts, Finance and Economic Development Permanent Secretary George Guvamatanga has said.

Appearing before the Parliamentary Portfolio Committee on Finance and Economic Development, Mr Guvamatanga said the separation of FCAs and RTGS accounts had become necessary as some banks had begun cheating their clientele of part of their United States dollar savings.

“The separation of FCA accounts and RTGS accounts was necessary as the singular system was now disadvantaging those with access to free funds, such as non-governmental organisations, exporters and those who receive money from the Diaspora.

“Because if you receive US$200 you shouldn’t be forced to rush to spend it because there is nowhere else to keep it or keep it under your pillow because there is no separation. So to protect those with access to such funds, it was very important to separate so that there is no confusion and I know — I come from the banking sector that in the past if you received money from the diaspora or from whatever source some banks would tell you that you can now access 70 percent of your money because the Reserve Bank said we should take the other 30 percent, which was not true,” he said.

“So there was an element of market indiscipline that was now starting to creep in and discouraging those with access to US dollars from bringing it into the formal system and we were trying to address that matter by saying let’s separate the accounts under the multi-currency system, which is still Government policy as we speak.”

Earlier this month, the Reserve Bank of Zimbabwe (RBZ) gave banks around two weeks to separate the two accounts as part of measures to preserve value for foreign currency earners. It was also largely expected that the measure will strengthen the multi-currency system for financial and price stability and to increase inflows of foreign currency. The Government has also moved to ensure that the FCAs are ring-fenced.

“Over and above the Nostro Deposit Protection Guarantee from Afreximbank, we are also reinforcing Nostro foreign currency accounts with a Statutory Instrument to guarantee that these are private deposits, and neither the Reserve Bank nor Government has any access to them,” Finance and Economic Development Minister Mthuli Ncube said in a statement from Indonesia earlier this month where he was attending the World Bank and International Monetary Fund annual meetings.

Separation of FCA accounts and RTGS accounts also brought into question the presumed equality of the value of the US dollar and the local bond note, but Mr Guvamatanga maintains that Government policy on the US dollar – bond note/RTGS rate is 1:1.

“We are even looking at several measures to strengthen the official 1:1 rate,” he said.

These measures would be in addition to the loan facility from Afreximbank that was secured by the Government to guarantee the 1:1 convertibility value of RTGS balances into the US dollar and availability of the green-back for Nostro foreign currency accounts.

On a related matter, President Emmerson Mnangagwa yesterday said the Government was working hard to ensure economic stabilisation, and that the multi-currency system was here to stay.

He said RTGS balances and bond notes were secure as monetary instruments.

“Whilst the country is going through difficult times mainly because of lack of foreign currency to meet the growing demand for (foreign) exchange across all the sectors of the economy, I would like to assure you all that the current multi-currency system of exchange is here to stay. All your RTGS balances at banks and bond notes in circulation, are safe and secure. Safe and secure as legal instruments. “ he said  at a meeting with business leaders at State House.

“There should be no pressure to exchange or to offload these balances as Government policy has not changed to warrant such anxiety,” he said at a meeting with business leaders at State House. – Herald