Accessibility links

Zimbabwe Central Bank Changes Rules Again


Zimbabwe's central bank has suddenly reversed some new rules it ordered before Christmas that cut depositor's access to their own money. Peta Thornycroft reports for VOA that commercial banks have received a directive withdrawing some regulations for electronic transfers.

Many analysts believe Reserve Bank of Zimbabwe Governor Gideon Gono is the most powerful man in Zimbabwe. He changes rules about privately-owned money without having to go to parliament, without consultation with the financial sector or commercial bankers.

State press reports indicate he does inform President Robert Mugabe and the group of security service chiefs known as the Joint Operational Command, who effectively run Zimbabwe.

Gono reveals rules changes by issuing a statement to the state-controlled media, commercial banks say they sometimes receive an e-mail that the rules have changed overnight.

He has changed the currency and rules almost continuously since he took office nearly four years ago, replacing bank notes with what he named bearer checks. The bearer checks have an expiration date, but many circulating in the economy expired more than two years ago.

Gono decides how much money depositors can withdraw and how much can be transferred electronically from accounts.

He refuses to allow the three commercial banks that have installed internet banking to extend the service to individuals. Only registered companies can do limited internet banking.

Shortly before Christmas Gono said electronic transfers needed an invoice stating for what the money was to be used. Individuals and companies were outraged and said the enormous build up of delays on electronic transfers grew until it was taking up to 10 days for them to clear.

Gono blamed the financial chaos on heavy summer rain. The central bank failed to deliver new higher value cash notes to the majority of the population who live in rural areas. It takes two of the highest-value notes of 750,000 Zimbabwe dollars to buy one loaf of bread.

Huge queues outside banks made Christmas a misery for most.

One man outside a building society in Harare, said he had queued all night and had only been allowed to withdraw 16 million Zimbabwe dollars, enough to buy a tube of toothpaste, or a small bag of rice.

Now bankers say the limit on electronic withdrawals has been increased by 300 percent, but the limit on checks remains. The central bank also says commercial banks can do electronic transfers without supporting documentation.

Many bank rules are unprecedented in Zimbabwe and apply nowhere else in the region.

Gono told the nation before Christmas that he was trying to stop the black market, accusing some people of fueling inflation and the devastating devaluation of the Zimbabwe dollar. He said 63 trillion Zimbabwe dollars were unaccounted for and that he suspected some top political and business leaders of hoarding cash for black-market transactions.

But economists say the missing amount is probably in the pockets of the population, because it only amounts to about $1.5 per person.

Most of Zimbabwe's economy is in the informal market and it has become a cash economy. About 95 percent of the population does not have a bank account.

The central bank has long been one of the largest players on the black market and its officials regularly change enormous amounts of Zimbabwe dollars with international companies. This is known because the government provides receipts for the transactions.

A government commentator complained in the last issue of the state-controlled Sunday Mail that Gono had not done enough to control the wild and chaotic financial sector, which had caused misery throughout the nation. The commentator said the chaos was the result of a U.S. plot to destabilize Zimbabwe.

Human rights lawyer Beatrice Mtetwa says banking controls imposed by the central bank as a violation of people's human and property rights.

XS
SM
MD
LG