Last week a Reserve Bank of Zimbabwe order was sent to banks ordering them to freeze accounts associated with an attached list of Ecocash and OneMoney agents. It turns out the central bank did not just stop there. It has now been revealed that the bank has also sent out an order to Zimbabwe’s largest mobile wallet operator, Ecocash. The order instructs Ecocash to freeze the agent lines of all traders whose transactions exceed $100 000 ZWL per month until certain KYC activities are completed.

The full statement from Ecocash on the issue

Notice to Customers & Agents
EcoCash wishes to advise that we received a directive from the Reserve Bank of Zimbabwe and the Financial Intelligence Unit of Zimbabwe to the effect that all Agents with transaction limits of over ZWL$100.000 per month should have their accounts frozen with immediate effect, except for

– Banking Institutions
– Bureaux de change
– Listed Companies (Zimbabwe Stock Exchange Listed Companies)
– International Organisations
– Microfinance Institutions
– Government and Quasi-government Institutions
This directive will impact Agent business operations as Agents will not have access to their float funds as well as liquidations. EcoCash was not consulted on this directive. We, therefore, did not provide any input into it The directive will not only impact the affected Agents but also the transactions they do with over 53,000 other EcoCash Agents and consequently our 11 million customers countrywide who rely on the Agent network.
Agent-reliant transactions to be affected are;
Cash-in,
Cash-out,
Airtime sales,
Customer registrations,
Prepaid electricity sales,
Kindly note that all other EcoCash transactions are not affected by this directive. We will provide you with an update on any further developments.
EcoCash
Cassava Smartech

Suspected forex dealers

This is probably the Reserve Bank’s latest effort to cudgel illegal foreign currency dealers. The reason by the Reserve Bank of Zimbabwe is that since most of the economy was/is in lockdown mode, not a lot of businesses are trading at these large volumes. The truth though is a little nuanced than that. Despite the lockdown for example, a lot of businesses have recorded brisk business and as always the inflation rate means that even small and medium shops might be able to breach this mark.

Another factor to point out is this, the RBZ is also right. A lot of illegal forex dealers have leased lines that were supposed to be used by bona fide agents. Agent lines have better limits and given where the rate is right now, buying and selling foreign currency requires massive amounts of transactions that will breach the $100 000 mark easily (actually based on last week’s rate of 1 USD: 50 ZWL that amounts to just $2 000 USD).

However here is another thing to note. Ecocash hasn’t given out agent lines in a while and sometimes the businesses that owned those lines have gone under as the economic crisis in Zimbabwe bites. Rather than having lines closed some actual genuine businesses have leased those lines from agents. This is a potential gray area that can qualify as money laundering, but in Zimbabwe businesses have coloured inside the lines on issues like this for a long time.