Thursday, 6 April 2017

Finance Minister Patrick Chinamasa Threatens Cash-Hoarding Retailers, Wholesalers

Finance minister Patrick Chinamasa yesterday threatened to enforce the Banking Use Promotions Act to deal with suspected cash-hoarding retailers and wholesalers as the cash crisis worsens.

Chinamasa told MPs that some companies were being monitored daily and the culprits could have their trading licences cancelled.

“The Reserve Bank of Zimbabwe (RBZ), through its Financial Intelligence Unit, has been positioning people at traders to find out cash sales of that day and how much was banked. We are going to intensify those efforts and it will not stop us from passing a law that any businessperson who does not bank money will have his licence withdrawn,” Chinamasa said.

“We have instances where on a daily basis $1,5 million is received, but only $35 000 is banked and if it is bond notes, they are hoarding them to buy foreign currency on the black market and they must stop because we are going to take stern measures to bring these saboteurs to book,” he said, adding that $104 000 worth of bond notes was expected to be circulating in the economy.
Finance Minister Patrick Chinamasa Threatens Cash-Hoarding Retailers, Wholesalers
Chinamasa said the country currently had 33 000 point-of-sale machines, adding there was need to import more to enable all traders, including vendors, to adopt use of plastic money.

He said the Bank Use Promotions Act compels traders to bank surplus cash on a daily basis.

“We have observed that most traders operating in businesses reserved for locals like public transport, retail shops, hairdressing salons and others are abusing their operations in the reserved sectors by not banking, and we will cancel their licences.”

Chinamasa said to date three traders had been arrested and appeared before the courts where they pleaded guilty and would be sentenced soon for not banking proceeds from their daily cash sales.

He said other factors fuelling the cash shortages included the high fiscal deficit exacerbated by the current account deficit and government’s employment costs, currently standing at above 93% of revenue, where salaries are paid through electronic transfer (RTGS) causing a misalignment when civil servants withdraw their salaries from the banks.

“This is the greatest cause of queues for cash as both RBZ and banks will be required to withdraw foreign currency from nostro accounts to meet cash requirements. Non-banking of cash by major traders is also causing cash shortages and queues and this indiscipline is counter-productive and cannot continue to be tolerated as money is like blood and needs to be circulated for the economy to survive,” Chinamasa said.
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