Last week the Reserve Bank of Zimbabwe promised that they would be using more and more shock and awe tactics against the illegal forex trade profession. Yesterday they delivered another shocker: company internal bank transfers will now be limited to two per day. As with all their limits on Ecocash and ZIPIT there were no consultations with stakeholders before the measures were crafted and there is no rationale behind the limits-they seem to have been picked from a hat.
4 June 2020
Measures to prevent abuse of internal bank transfers for illegal foreign currency transactions
Further to our circular to banks dated 26th of May 2020, titled “Enhanced Scrutiny of Transactions”, we have noted the increasing abuse of the internal bank transfers facility for purposes of parallel market dealings.
We have noted a trend where entities are using their bank accounts to buy foreign currency, using a network of “runners”, some of whom have been advertising their services on social media. These illicit transactions manifest in the form of daily multiple payments from one account to beneficiaries who hold accounts in the same bank.
In order to curb this practice, banks are directed to implement the following measures, with immediate effect:
1. Each bank customer shall make not more than two transactions per day by way of internal transfer, regardless of the values involved. There is no restriction on RTGS transfers, but banks should exercise necessary due diligence.
2. Where a customer has genuine and proven need to conduct more than two transactions in a day by way of internal transfers, the customer shall obtain approval from bank management (whether at head office or branch level). Banks shall submit daily returns to the FIU giving details of such transactions and the underlying business purpose.
Individual banks may implement any additional controls on internal and/or inter-bank transfers as they see fit.
Banks shall continue to submit STRs and other regulatory returns as necessary.
This FIU is now adopting strict enforcement measures against banks that are found to be complicit in allowing their clients to conduct illicit transactions.
Financial Intelligence UnitThe bombshell
More grenade policies
Instead of a carrot and stick approach, the central bank is sticking to its grenade approach. Never mind that the last time they tried this just over a decade ago it eventually killed the local currency as people roundly rejected it. We are seeing more and more traders on both the formal and informal market starting to reject a currency that will not allow them to restock.
In the meantime the RBZ has not done anything to ensure that companies are able to access foreign currency on the formal market. It’s all command and no carrot.
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