Gono scraps cash withdrawal limits

Gono scraps cash withdrawal limits
Published: 28 February 2012 (1429 Views)
BANKS will scrap the advance notice requirement for all cash withdrawals above US$10 000 with effect from Thursday as measures taken by Finance Minister Tendai Biti to ease liquidity challenges in the economy take effect.

Key measures announced to help ease the liquidity crunch included the liquidation of US$110 million worth of Zimbabwe's Special Drawing Rights from the International Monetary Fund and repatriation by local banks of funds held in their nostro accounts.

Last week Minister Biti said banks had so far repatriated US$71 million in the nostro accounts since the order for banks to repatriate 75 percent of the money they are holding in their offshore accounts was issued.

He added that Treasury expected the remaining US$127 million to be returned by last Friday.

Yesterday Minister Biti could not be drawn to explain whether all the measures to improve liquidity in the economy had been effected.

On the liquidation of the US$110 million SDRs, he said: "What connection is there between the cash withdrawal limits and the SDRs? I do not see a connection."

However, the Bankers' Association of Zimbabwe yesterday said Minister Biti was still in the process of liquidating the SDR funds to be injected into the economy through support to key infrastructure projects, agriculture and the Reserve Bank of Zimbabwe.

From tomorrow, financial institutions will use their discretion on such transactions based on their knowledge of the customers' record. The notice requirement for instant cash withdrawals above US$10 000 was meant to give banks adequate time to prepare to pay out such transactions.

RBZ Governor Dr Gideon Gono announced last week at a joint Press briefing with Minister Biti that the withdrawal limits would be scrapped.

"In view of the improving liquidity situation in the economy and the need to encourage savings and use of the formal banking system, the Reserve Bank will be lifting the previously announced cash withdrawal limits with effect from March 1 2012.

"Banks are encouraged to continuously apply the Know Your Customer principle in order to avoid the abuse of cash," Dr Gono said.

BAZ president Mr John Mushayavanhu said the lifting of the restriction followed the realisation that many people were making large cash withdrawals.

"They realised that you cannot apply a blanket restriction on all customers. Some customers have to pay large amounts all the time while others do not have to do that frequently," he said.

The KYC principle would enable banks to serve their customers, manage their liquidity and abide by global laws on preventing abuses such as money laundering.

The African Development Bank last week said the cash withdrawal limits were counter-productive to the economy.

"Cash limits can result in weakening bank depositor confidence, panic withdrawals, reduced bank deposits, deposit flight from weak to strong banks, externalisation of cash and investments in illiquid assets," said the AfDB.

- th

 0

You May Like These Videos

Comments

There are no comments.

Latest stories

Mnangagwa embraces Chamisa as he fears army plots

by Mandla Ndlovu | 24 April 2019 | 80 Views

Let's discuss no insults please

by Mbonisi Solomon Gumbo | 24 April 2019 | 40 Views

Dabengwa in India for medical attention

by Iphithule Maphosa | 24 April 2019 | 40 Views

MDC Alliance splashes $3m on congress

by Staff reporter | 24 April 2019 | 64 Views

Zesa to install cameras on transformers

by Staff reporter | 24 April 2019 | 41 Views

Dembare is sinking and very fast

by Memory Mucherahowa | 24 April 2019 | 47 Views

Man fatally stabs father

by Staff reporter | 24 April 2019 | 52 Views

58 people killed over Independence and Easter holidays

by Staff reporter | 24 April 2019 | 44 Views

Jilted man strangles ex-lover to death

by Staff reporter | 24 April 2019 | 49 Views

Mum flushes baby down the toilet

by Staff reporter | 24 April 2019 | 44 Views

19 injured in Luveve Road pile-up

by Staff reporter | 24 April 2019 | 35 Views

Greyhound bus burns. . .34 passengers, crew escape unharmed

by Staff reporter | 24 April 2019 | 45 Views

Ndiraya takes over at Dembare

by Staff reporter | 24 April 2019 | 49 Views

Zimbabweans find it hard to survive in the English culture

by Dr Masimba Mavaza | 24 April 2019 | 33 Views

Highlander's worst start

by Staff reporter | 24 April 2019 | 38 Views

Two war veterans die

by Staff reporter | 24 April 2019 | 53 Views

Zanu-PF gold baron, 9 others up for public violence

by Staff reporter | 24 April 2019 | 49 Views

Villagers forced to fund Uhuru festivities

by Staff reporter | 24 April 2019 | 41 Views

Zimbabwe @39: A return to the source

by Takura Zhangazha | 24 April 2019 | 36 Views

MPs' office broken into

by Staff reporter | 24 April 2019 | 48 Views

Security guard axes colleague, flees

by Staff reporter | 24 April 2019 | 44 Views

Madinda blames pre-season strike

by Staff reporter | 24 April 2019 | 35 Views

ZBCtv to screen Bulawayo full council meetings

by Staff reporter | 24 April 2019 | 37 Views

Drama as apostolic sect members seize injured driver from hospital

by Staff reporter | 24 April 2019 | 52 Views

Fuel supplies improve for ZITF

by Staff reporter | 24 April 2019 | 32 Views

Serial rapist in court over 5 counts of rape, robbery

by Staff reporter | 24 April 2019 | 17 Views

Mnangagwa takes turnaround agenda to ZITF

by Staff reporter | 24 April 2019 | 19 Views

Soldier bites father-in-law

by Staff reporter | 24 April 2019 | 29 Views

China takes over Chimanimani roads rehab

by Staff reporter | 24 April 2019 | 23 Views

When things fall apart

by Fr Oskar Wermter sj | 24 April 2019 | 34 Views

Chiredzi folk fail ZNA intake

by Staff reporter | 24 April 2019 | 25 Views

PHOTO: Dabengwa wheeled to plane in wheelchair

by ZimLive | 24 April 2019 | 62 Views

Fuel prices up again

by Staff reporter | 24 April 2019 | 43 Views

'Crooks surround Mnangagwa must go,' says Chamisa

by Staff reporter | 24 April 2019 | 29 Views

Mnangagwa, Chamisa to meet face-to-face

by Staff reporter | 24 April 2019 | 34 Views