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Tinashe Makichi Harare Bureau
Zimbabwe does not have a clear regulation that protects depositors funds under mobile banking in the event that a telecommunications company collapses. BAZ legal committee chairperson Aisha Shamu told the Parliamentary Portfolio Committee on Budget and Finance that the new Banking Act should address issues surrounding protection of depositors funds under mobile banking platforms.
The Banking Act Amendment Bill is currently on its second reading in Parliament. Shamu said Zimbabwe should take a cue from countries like Kenya which have well defined legislations that govern mobile banking and protection of depositors funds.
“There’s no clear regulation that protects the interest of depositors in the event that a telecommunications company collapses. In the event of an eventuality depositors don’t have somewhere specific to make recourse like what the Deposit Protection Corporation is for banks.
“Countries like Kenya have a clear framework and legislation that govern mobile banking as compared to Zimbabwe where arrangements between telecommunication companies are rather contractual and not constitutional,” said Shamu.
This came after the committee raised concern over the possible risks associated with mobile banking and asked BAZ to give an account of the measures currently taken to protect depositors’ funds in the event of a collapse of a telecommunications company.
Shamu called for an inclusion of a regulation in the Banking Act to monitor mobile banking and protection of depositors funds. BAZ legal committee member Tinashe Masiiwa also expressed the importance of including a mobile banking regulation that caters for the protection of depositors funds. “Of course there are identifiable risks when it comes to mobile money banking.
“The National Payment system regulations read that any electronic money that a telecommunications company has should be equivalent to a certain amount sitting in a bank somewhere in Zimbabwe in the form of a trust account. So if a bank says we’ve moved $1 million that means there should be $1 million somewhere in the bank and that’s the law. National payments systems are very clear on that,” said Masiiwa.
“So all mobile network operators should open a trust account and those accounts are clear that no funds should be withdrawn for operations. The arrangement between banks and telecommunication companies is rather contractual and not constitutional.” Parliament also expressed concern on the issue of Econet where the telecommunications giant has a significant shareholding in Steward Bank in line with the current regulation as explained by Masiiwa.
They said such an arrangement was subject to risk on depositors’ funds under its mobile banking platform. Masiiwa however said Econet is a telecommunications company that owns a bank and such issues should be addressed by the Banking Act. ZNCC president Davison Norupiri also voiced concern over the perceived risk associated with mobile money banking.
“In the event that someone dies either in an accident or any other means while having money in their mobile money wallets what will happen to that money in the event that there’s no one with the right literacy to claim that money. The Banking Act should provide clear guidelines when it comes to regulation of this banking platform because if you look at banks there’s the DPC but on mobile banking there is nothing like that,” said Norupiri.
Online Reporter