RBZ sets $10 000 cash withdrawal limit

RBZ sets $10 000 cash withdrawal limit
Published: 02 February 2012 (644 Views)
THE Reserve Bank of Zimbabwe has set US$10 000 as the cash withdrawal limit with amounts exceeding this threshold now requiring prior notice to the processing bank. Reserve Bank of Zimbabwe Governor Dr Gideon Gono announced the requirement while presenting the 2012 Monetary Policy Statement to bank executives and journalists on Tuesday.

Dr Gono said that the worsening liquidity, delayed cash payments and illegal cash externalisation had prompted the decision.

Liquidity challenges that characterised the economy between December and this month were due to high value and high volume payments.

The high value and high volume transactions drained most of the liquidity causing serious problems on Real Time Gross Settlement transfers.

As such, all banks have been called on to stagger payments of high value and high volume transactions to avoid clogging the system.

"There is need to institute staggering payments for high value transactions to allow banks sufficient time for such transactions.

"To facilitate smooth payment transactions as well as curbing illegal externalisation of cash, all financial institutions are called upon to moderate cash payments to a maximum of US$10 000," he said.

Transactions for between US$10 001 and US$20 000 now require 24 hours notice and US$20 001 to US$30 000 48 hours. For US$30 001 to US$40 000 72 hours, US$40 0001 to US$50 000 96 hours and five days notice is required for payments above US$50 001.

Dr Gono urged the banking public to use the RTGS payment system, credit cards and other electronic facilities in settling transactions.

A number of options have also been proposed in an attempt to keep improving liquidity conditions in the banking sector and economy.

The central bank will soon start assisting banks facing shortages after Treasury injected US$20 million to complement the US$7 million initially set aside for RBZ's lender of last resort function.

Dr Gono said they had also started discussions to determine the proportion of its liabilities to banks that it will convert into discounted and tradable paper banks can use to borrow money.

The discounted and tradable paper will also enable banks to access the US$100 million being negotiated with a regional bank.

The central bank owes banks US$83 million in statutory deposits used to fund critical national payments prior to 2009.

Banks sitting on excess liquidity have been urged to provide assistance to fellow banking institutions facing shortages.

Dr Gono also urged banks sitting on huge sums of money in foreign accounts to repatriate some of the money to ease liquidity in the economy.

- herald

Tags: RBZ, Cash, Limit,
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