adminHarare Bureau
STANDARD Chartered Bank Zimbabwe has hinted on intentions to stop all United States dollar payments on cross border transactions starting August 31, 2015.
It has emerged the bank’s vendor in New York, USA, has changed its service terms in what could be part of sanctions that continue to muzzle the country’s economic growth.
Sources say the move will effectively close accounts linked to high risk and politically exposed clients.
An internal memo seen by our Harare Bureau indicates that with effect from this month end, StanChart will no longer process US$ cross border payments including but not limited to outward telegraphic transfers, letters of credit and cheque transactions.
This, however, will not impact on customers’ ability to transact in any other major currencies including the British pound, South African rand and the euro.
Our Harare Bureau is reliably informed that in order to effect the changes, the bank, which was the first bank to open its doors in the country before independence, has classified account holders into different categories while those with political links fall under high risk and are likely to be affected.
The move will also affect account holders who have offshore loans committed at the bank.
According to a Frequently Asked Questions sheet, which the bank circulated with the memo, the bank says it would not be able to facilitate the future settlement of any loans.
“We regret to advise that we’ll not be able to facilitate the future settlement of this loan. In this regard, the notice we’ve given you is meant to allow you to make the necessary amendments to the loan arrangements so that you’re not in default of both the loans and the Exchange Control requirements,” said the bank.
The bank, however, adds that the RBZ Exchange Control approval remains valid and is transferable to another bank.
StanChart head of corporate affairs Lillian Hapanyengwi confirmed the new plan last Friday in emailed responses saying this was a result of internal policy and as part of compliance with international regulatory environment.
“The Standard Chartered Group is committed to achieving the highest standards of compliance and controls and is implementing enhancements in our controls in Zimbabwe to ensure that we can support our clients and customers as they transact internationally.
“A small number of Standard Chartered Zimbabwe customers may from September experience difficulties in making US dollar cross border payments as a result of restrictions imposed by our US Correspondent, Standard Chartered Bank’s New York branch, with whom we’ll work to minimise customer impact. Clearly we’re very concerned about customer impact and have sought to minimise this.
“We’re communicating actively with impacted clients and will work with them to minimise the disruption to their business wherever possible,” she said.
“These restrictions are not intended to be permanent but will continue until we’ve improved our client due diligence and AML processes in Standard Chartered Zimbabwe to meet global standards. Once properly implemented, the enhancements being made by Standard Chartered Bank Zimbabwe will support a return to normal.
“The restrictions don’t affect our customers’ ability to transact domestically in Zimbabwe in US dollars, nor to make cross-border payments in other currencies. Customers will also continue to be able to use their International VISA debit card outside of Zimbabwe.”
It is alleged that communication to account holders has been done verbally and no official communication was done in writing.
The move will also affect those who use international visa cards, those with stop orders on foreign accounts. Sources say the move is part of a broader plan of divesting out of Zimbabwe.
The bank denies that the restrictions are about sanctions but about improving the control environment. It said the Reserve Bank of Zimbabwe had been advised and is aware of the move.
Online Reporter