Online Reporter
Richard Muponde, Zimpapers Politics Hub
THE Reserve Bank of Zimbabwe (RBZ) will soon swoop on businesses and individuals hoarding money in cash deposit boxes in banks, homes and business premises.
Authorities are concerned that these practices leave millions of dollars lying idle, depriving the economy of much-needed cash for transactions.
Announcing his 2025 Monetary Policy Statement in February, RBZ Governor Dr John Mushayavanhu termed the practice of hoarding cash in banks or company premises as financial disintermediation, which he said is stifling economic growth by depriving economic agents of much-needed liquidity.
He noted that some manufacturers are supplying goods to the informal market but are not banking their proceeds. Instead, they are keeping these funds in their cash deposit boxes, which violates the Anti-Money Laundering Act.
Dr Mushayavanhu stated that the Financial Intelligence Unit (FIU) of the RBZ will not stand by but take action to address this malpractice.
In an interview with Zimpapers Politics Hub on Tuesday, FIU Director General Mr Oliver Chiperesa confirmed the impending blitz, citing concerns raised by Dr Mushayavanhu.
“You may recall that during the presentation of his 2025 Monetary Policy Statement, the RBZ Governor mentioned that businesses and individuals, especially manufacturers and informal retailers, were hoarding millions of dollars in their cash deposit boxes. This is depriving the economy of the much-needed liquidity,” Mr Chiperesa said.
“We are currently working on the regulations to ensure that we conduct this blitz within the confines of the law. Normally, cash deposit boxes are used to keep important documents, but the current trend is that they are being used to store large sums of money outside the banking system, which is illegal according to the Anti-Money Laundering Act,” he added.
Mr Chiperesa said it was encouraging to see improved use of the official banking system, which promotes free financial flows.
“We want to encourage growth and ensure that all transactions are accounted for in line with anti-money laundering and anti-terrorism regulations. We were removed from the FATF (Financial Action Task Force) grey list because of the clean flow of money in our economy, and we want to maintain that achievement to support economic growth through attracting Foreign Direct Investment,” he said.
The FIU recently strengthened its operations by opening offices in Bulawayo to bolster ZiG stability. However, the widespread hoarding of millions of dollars in cash deposit boxes is a major challenge as it threatens financial stability.
Currently, as Dr Mushayavanhu indicated, there is stability in the exchange rate. He hinted that the continued stability of Zimbabwe Gold (ZiG) is expected to lead to more transactions being conducted in the local currency. These transactions are expected to include fuel sales as the market begins to embrace ZiG as a store of value and a reliable medium of exchange.
Dr Mushayavanhu also emphasised that keeping large sums of cash is an unnecessary risk given the upward revision in limits on prepaid credit and the attractive interest rates on savings.
As part of efforts to promote a culture of saving and bolster confidence in the local banking sector, the RBZ has implemented incremental increases in interest rates on savings accounts.
The stability of ZiG has led to an increase in ZiG transactions and deposits, signalling confidence and acceptance of the local currency by the market.
This development has also resulted in the proportion of local currency deposits held by banks increasing from less than 10 percent before the introduction of ZiG to current levels of around 15 percent.
The central bank also stated that new regulations, which stipulate that 50 percent of Quarterly Payment Dates.
