Reserve Bank bans Cash in and Cash out facilities

Harare – The Reserve Bank of Zimbabwe (RBZ) has issued a directive to discontinue cash–in and cash-out activities with immediate effect in what seems to be a desperate move to suppress the high premiums charged by agents which have sparked outrage from the public.

Mobile money services have become quite dominant in Zimbabwe in the wake of ongoing cash shortages with EcoCash in particular handling the largest chunk of electronic transfer activities in the country.

Convenient as it is, questions have been raised regarding the contact of the mobile money agents who are now charging high commissions for cash-out services above the maximum prescribed rate by the service holders.

An online campaign was raised against the mobile money service providers highly targeting the EcoCash agents while government through the Zimbabwe Anti-Corruption Commission (ZACC) roped in and announced it will be launching an investigation into the matter saying that agents manipulating the system will be arrested.

In a circular issued on Monday, RBZ’s department of Financial Markets, National Payment Systems Deputy Director Mr Josephat Mutepfa said the charging of commissions outside the approved framework adversely affects the smooth operation of payment systems and have the negative effect of distorting pricing of goods and services.

“In view of the above, all mobile payment system providers and merchants are hereby directed to discontinue cash-in and cash-out with immediate effect,” Mr Mutepfa said.

“Furthermore, all economic agents are with immediate effect directed to discontinue cash-back facilities.”

In doing so, if not already prepared, the central bank could put itself under pressure to increase the amount of cash in circulation so as to match the electronic balances and improve the public’s access to cash which for a long period now has become only readily available on side markets.

Equity Axis News

Raynold Mhotseka

Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment. He can be contacted through the following email links, rayjnr.mhotseka@gmail.com and raynoldm@equityaxis.net.

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