Guilty fines of businesses not banking can go up to US$500 000 – RBZ

John Mangudya

RBZ Governor John Mangudya

…RBZ directs mobile wallet operators to reduce costs
THE Reserve Bank of Zimbabwe says guilty fines of retailers who do not bank money can go up to US$500 000 while there is also an option of prosecution.

The central bank also directed mobile wallet operators to reduce the costs of transactions on their platforms to ease the burden on consumers at a meeting held on Friday. In line with the call EcoCash has announced that payments made on its mobile money platform, EcoCash, will not attract any transaction fees except the 5c tax on every transaction.

Governor John Mangudya said the central bank, which administers seven Acts, will use the Bank Use Promotion and Suppression of Money Laundering Act to compel businesses particularly retailers to bank money.

The Acts state that every trader and parastatal shall, unless it has good cause for not doing so, deposit in an account with a financial institution no later than the close of normal business hours on the day following that on which the cash is received or on the next banking day —
(a) cash that is surplus to the requirements of the trader or parastatal; or
(b) cash in excess of ten million dollars (or such other amount in excess of ten million dollars as the Minister may prescribe from time to time); whichever is the lesser amount

“We have come to the realisation that moral suasion has failed and will now use the Acts we have under our control to compel businesses to bank. We have been importing cash weekly but that money is not flowing back to the banks. It should be banked so that money can circulate in the economy.”

Fines for not banking cash can go up to US$500 000 while the offence can also be prosecuted and the business licence cancelled. “What makes the offence worse is that the retail sector is listed as a reserved sector for locals under the Indigenisation Act. Not banking money can lead to licence cancellation.”

“We respect businesses but they should behave and operate along the parameters set by the laws of the country.”

A team from the Bank Use Promotion and Suppression of Money Laundering Unit made up of  inspectors had been deployed to businesses starting last week with the Act empowering them to work with police officers. Any designated institution, trader or parastatal which hinders or obstructs or fails to comply with a lawful request of an inspector, assistant of an inspector or police officer shall be guilty of an offence and liable to a fine or imprisonment for a period not exceeding three years, or both.

While the big retailers have been banking their money and greater use of POS  machines has been observed, small operations dominated by Chinese, Nigerians and Indians (Pakistanis) have not been doing such with some of them at the forefront of externalisation. The Source

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