First it was EcoCash and now ZIPIT is getting the same treatment. The Financial Intelligence Unit (previously an arm of the RBZ but now operating independently) has issued a directive to ZIPIT CEO Cyril Nyatsanza placing a daily and monthly limit on ZIPIT transactions.

The Directive dated 27 May reads;

It’s no surprise that the FIU is now targeting ZIPIT the same way they’ve targeted EcoCash over the last few weeks.

Money changers started migrating from EcoCash to ZIPIT and OneMoney (which is also powered by ZIPIT) to move money way before the FIU sent the directive to EcoCash so it was only a matter of time before ZIPIT was under the microscope as well.

The post ZIPIT Given Directive To Place Monthly Limits Similar To EcoCash By RBZ appeared first on Techzim.

EcoCash seems to have blocked Merchant to Agent transactions though it’s not exactly clear what their reason for doing so is at the time of writing.

The first hunch would be that this is yet another directive from the RBZ but if it is it’s a bit strange that the RBZ has not shared that directive publicly as they have all other directives they’ve recently issued to EcoCash, and ZIPIT.

We reached out to EcoCash representative to better understand if they had made this decision internally or if it was dictated to them by the RBZ as we suspect and they confirmed that it was a directive from the Financial Intelligence Unit.

The blocking of this transaction type follows a directive limiting the amount agents can transact on a monthly basis to ZW$100 000 per month. The basis for RBZs directive was because EcoCash lax regulation of said platform meant their services are being used with ill-intent to drive up parallel market rates. At least that’s RBZs view of the situation.

The blocking of Merchant to agent transactions makes it harder to use mobile money services since the only transaction type left for merchants to liquidate their EcoCash balance is the wallet to bank transaction.

From the FIUs perspective, you can see what they are thinking. Merchants change money from agents and RBZ has been saying some of the agents changing money don’t have up to date KYC information. By forcing merchants to move that money to their bank accounts instead – if the money is used to buy forex the RBZ will be able to track that “transaction”.

The only problem with that is this all makes mobile money far less attractive than it was before since merchants now have to consider how they are going to move that money once customers have bought from their stores.

At the end of the day, the FIU and the RBZ by extension are making it harder for consumers to transact as articulated in a separate article and this is not the solution to the root problem – which is simply the fact that Zimbabweans will never put their money in the banks so long as its possible that they will wake up with that money gone.

• Agent to agent transaction;
• Agent to bulk payer
• Bulk payer to bulk payer;
• bulk payer to agent

The post [Update] EcoCash Merchant To Agent & A Host Of Other Transactions Blocked By FIU! appeared first on Techzim.

The RBZ through the Financial Intelligence Unit recently issued a directive that makes it illegal for one to advertise their money changing services on social media. This is was the reaction from WhatsApp.

The post Video: WhatsApp reacts to RBZ law banning money changing ads on social media appeared first on Techzim.

The Financial Intelligence Unit (FIU) an agency of the Reserve Bank of Zimbabwe has reversed it decision issued on June 4th. The directive issued was to limit the number of internal bank transfers to 2 a day.

The turn around came after Members of The Bankers Association of Zimbabwe made an appeal to the Reserve Bank. Financial Analyst Happi Zengeni tweeted:

The Financial Intelligence Unit has revoked a directive issued to banks limiting internal transfer amounts following representations made by the Bankers Association of Zimbabwe. On June 4, the FIU directed all banks to limit internal transfers to just two per day.

@happ_zenge

The acting Director-General of the FIU Oliver, had on the 4th of June ordered banks to limit their transfers stating:

Each bank customer shall make no more than two transactions per day by way of internal transfer regardless of the values involved. There is no restriction on RTGS transfers but banks should exercise necessary due diligence.

This measure was implemented to slow down the slow down the parallel market transactions that were being done through internal transfers.

“We have noted a trend where entities are using their bank accounts to buy foreign currency, using a network of “runners”, some of whom have been advertising their services on social media. These illicit transactions manifest in the form of daily multiple payments from one account to beneficiaries who hold accounts in the same bank.”

Oliver Chaperesa, FIU Acting Director General

With the representations made by the Bankers Association yet to be released. My guess is the sheer amount of requests that were lodged to banks daily was part of the appeal. This process, I imagine, became cumbersome for financial institutions and inconvenient for customers. They would have also seen a decrease in revenue generated from internal transfers. The latter being the more likely reason.

The post You Can Now Do More Than Two Bank Transfers A Day. RBZ Reverses Decision. appeared first on Techzim.

Zimbabwean authorities should just make up their minds especially the central bank. This institution flip flops more than a pair of slippers that go by that name.

Dual pricing

Today the RBZ Governor issued a statement on the re-introduction of the interbank foreign currency auction. His statement concluded by saying:

Dual Pricing System
In order to enhance the efficient pricing system in the economy, businesses will be required to display prices for goods and services and charge for all domestic transactions in both local and foreign currency at the ruling market rate.

But there is a law that prohibits that

In September last year, the government published a statutory instrument (their preferred mode of circumventing the parliament and passing arbitrary laws) which says:

In particular no person shall quote, display, label, solicit for the payment of, receive or pay the price of any goods, services, fee or commission in any currency other than the Zimbabwe Dollar.

This offense of course came with a hefty fine (well at the time) for each day you displayed prices in USD.

All this confusion

This is what happens when laws and directives are made on the fly and with crazy doses of myopia. Is anyone pausing to think through anything anymore? We are all confused and we get poorer every time goal posts are changed on us. Taneta purizi…

The post Businesses Now Required To List Prices In Both USD And Local Currency, A Practice Declared Illegal A Few Months Ago appeared first on Techzim.

With recent news of Government’s attempt to ban EcoCash and all mobile money platforms, I got to thinking. How many times has the government and financial authorities shifted the goalposts regarding what our problem really is?

In 2018 what had been a steady decline turned into the opening of flood gates and since then the RBZ, the President and at times other institutions linked to the government have taken turns to point fingers at what it is that is behind foreign currency manipulation. Here’s a timeline;

October 2018 – Mangudya says influential people behind black market

Two months after the election of President Mnangagwa, it started. The Reserve Bank governor came out and said the following:

These are influential people with access to huge sums of cash. It has been discovered that one character has been pushing onto the black market as much as $48 million in foreign currency. This person has access to cash and it is difficult to understand how this could have happened without the knowledge of the CIO, the FIU, the police as well as the commercial bank.

John Mangudya – Reserve Bank Governor

It seems the Reserve Bank governor actually knew who the person in question was and in fact promised that something would happen to this individual;

The meeting called by the President could trigger a nasty fall-out and there is already gnashing of teeth. Some people have a lot of explaining to do and heads will roll…

Fast forward 2 years later, we are still waiting for heads to roll and for the people with explaining to do so. This was the first of many such insincere proclamations from the RBZ, as we’ll see.

16 September 2019 – ZACC investigates EcoCash agents for selling cash

Zimbabwe’s Anti-Corruption Commission (ZACC) started an investigation into agents stating that they were concerned by their activity and the negative impact it had on foreign exchange rates;

We are concerned about the volumes of isolated of reports we have received in connection @EcoCashZW agents manipulating the cash ecosystem to their unfair advantage by selling cash & at prohibiting rates. We are aware that this practice is enabled & supported at a systematic level.

ZACC

This was the first of many occassions in which EcoCash would go under the microscope in relation to the forex rates.

17 September 2019 – RBZ says they don’t have all control of foreign currency and thus can’t control the black market

Deputy Governor at the Central bank came with a different angle as to why the parallel market continued to be a problem;

The existence of a parallel market is a reflection of shortages in the system or the wrong incentives in the system.

Clearly we have to fix that and deal with that (black) market and the best way to deal with that is to make sure the interbank rate is sufficiently priced and there is always sufficient foreign currency.

The only way we can control those kinds of markets where there is a parallel market is when the central bank had control of all the foreign currency in the system.

As things stand, we don’t have control of all the foreign currency in the system. A lot of it is outside our powers or purview and we have no way of knowing where it ends.

Kupukile Mlambo

As we have become accustomed to hearing, it was not the Reserve Bank that was at fault. Nothing new here.

21 September 2019 – Bureau De Change operations “refined” by RBZ

Bureau De Changes had been operating sub-optimally if we are to take the RBZs word and thus a host of measures were introduced in hopes of slowing down the devaluing of local currency These measures included limiting the amount of forex people could buy from Bureau De Changes and limiting sell of forex by Bureau De Changes to people travelling only.

Not much changed in regard to the trajectory of the ZW$ – it continued in free fall.

22 September 2019 – Sakunda, Croco Motors and Access Finance accounts frozen

The RBZ came out said the accounts of these companies had been suspended pending investigation. The President’s statement on this issue was more telling and he suggested that the companies were behind the spike;

On the monetary side, yes, we introduced the one currency. For six or eight weeks, it remained stable, but then our people are very intelligent. We have people who find ways to fight that and undermine (the currency), but yesterday we also became smarter than their being smart, so we took some action.

President Emmerson Mnangagwa speaking after the freezing of accounts

The result of that investigation was never publicised and eventually all companies got access to their accounts and life went on.

25 January 2020 – RBZ freezes accounts of forex rate manipulator China Nanchang

The RBZ issued out a statement to the effect that a company which had injected money into the black market had their accounts frozen;

The RBZ escalated the matter to the Financial Intelligence Unit (FIU) for investigation and the FIU has so far identified one entity (China Nanchang). which has used its bank accounts to inject millions of dollars into the parallel market in the last few days.

The FIU has ordered the freezing of the identified account pending further analysis and is undertaking ongoing surveillance to identify more culprits involved in the paralled market transactions, particularly on the EcoCash platform.

Whether or not the further analysis took place is not clear. We just know that the RBZ and its officials did not make public reference to this incident again after this announcement – at least as far as I can see.

In fact the most recent report to do with this very same company states that the company received US$1 million back in 2014 meant for the 2014 African Union Sports Council Region Five Youth Games in Bulawayo. The funds were reportedly diverted after the Ministry of Finance issued out a directive that the money be used for construction of two dams instead. The dams were never built, the money not repaid, you know how the story goes.

Anyway, I digress – that was just to illustrate Nanchang’s proximity to the government. Let’s move on shall we.

15 March 2020 – Mthuli Ncube suspends ‘trade’ of Old Mutual, PPC And Seedco shares to kill black market

On this fateful day, fungibility of shares was suspended. Fungibility of shares allowed people investing in Old Mutual, PPC and Seedco shares to buy shares locally and dispose of them on the foreign stock exchanges these companies are also listed on. People were buying shares locally and then disposing of them on foreign exchanges and thus exchanging local currency for foreign currency.

This was the first time Old Mutual would come under the microscope and not the last. This too failed to stop the currency devaluation.

2 May 2020 – RBZ Freezes accounts of mobile money agent lines because they are manipulating the rates

The Central Bank directed mobile money platforms to ban agent lines who were allegedly manipulating the rate;

You are directed to identify all accounts of the listed persons/entities that are linked either to Ecocash or to One Money (i.e. accounts that allow the customer to move funds between the bank account and the mobile money wallet, and/or vice versa) and to, immediately freeze such accounts.

This was effected and resulted in a court battle between EcoCash and the Central Bank and that too is yet to be resolved. Despite EcoCash banning the agents and placing new limits for transactions that too hasn’t slowed down the rate.

28 May 2020 – RBZ/FIU gives the directive to place transaction limits on ZIPIT

The central bank again issued a directive that forced ZIPIT to place transaction limits similar to the ones that had been forced upon EcoCash. This too was meant to limit the amounts moved and volumes traded by money changers. Maybe the volumes have reduced but even if they have that has not translated to the ZW$ strengthening against the US$.

Confronting the wrong problem

The recent announcement by the Ministry of Information seeking to ban mobile money with immediate effect, is just the culmination of the blame game. Yes the black market is a problem and authorities must try put an end to it. What won’t work is trying to put an end to the black market without fixing the main problems or corruption and disappearing money in Zimbabwean bank accounts. The black market is a symptom of the real problem.

Without addressing the real issues plaguing Zimbabwe we will keep going in circles. Fun fact, a colleague of mine sent me an article that shows how we are in the same place we were 14 years ago. The Reserve Bank Governor back then, Gideon Gono, banned 16 money transfer agencies from operating in Zimbabwe because… You guessed it, they were dealing on the black market. Ahyas…

The post Here’s everything the government has blamed for manipulating the forex rate since 2018 appeared first on Techzim.

NetOne and MyCash have followed up Econet’s response to the announcement made by Information Secretary Nick Mangwana last night.

NetOne

Dear Valued Customer,

We would like to advise that OneMoney services are still operating normally. Do not hesitate to contact us on the numbers provided below, for any queries and enquiries.

OneMoney, it’s One time.

Toll Free 121 WhatsApp helpline 0712 98o 198

NetOne

MyCash

Dear Valued Customers

MyCash continues to operate as normal, we are regulated by the Reserve Bank of Zimbabwe and we have received no such directives to stop operating. MyCash customer funds are guaranteed and all platforms are fully operational.

MyCash

MyCash

The post OneMoney and MyCash respond to mobile money ban: platforms are still working appeared first on Techzim.

Yesterday the government through Nick Mangwana issued a statement declaring that mobile money was suspended with immediate effect. Naturally the public wasn’t happy and all three mobile telecommunications companies released statements to the effect that they would wait for a directive from the relevant authority.

It seems like they have revised the original plan, probably because of public outcry. The original was honestly ridiculous, it was too far-reaching and would have absolutely decimated the fragile economy. The following is the statement released by the Reserve Bank:

PRESS STATEMENT

On the Suspension of Monetary Transactions on Phone Based Mobile Money Platforms

Following the Government Press Release on the Suspension of Monetary Transactions on Mobile Based Money Platforms (One Money, MyCash, Ecocash and Telecash) dated 26 June 2020, the Reserve Bank of Zimbabwe (the Bank) wishes to advise the public as follows:

a) All mobile money agents are suspended from facilitating mobile financial transactions with immediate effect.

b) All merchant transactions are suspended except for receiving payments for goods and services as well as payment of utilities (water, power and airtime), which have been limited up to ZW$5000 per day for the convenience of the transacting public.

c) All mobile money liquidations should be done through the banking system.

d) All bulk payer transactions have been suspended with immediate effect.

These unprecedented measures have been necessitated by the need to protect consumers on mobile money platforms which have been abused by unscrupulous and unpartisan individuals and entities to create instability and inefficiencies in the economy.

Members of the public are assured that their bona-fide transactions will be processed normally.

John P. Mangudya Governor 27 June 2020

RBZ

The post Govt saves face, RBZ statement on EcoCash ban: reversing from the original plan appeared first on Techzim.

Yesterday the Reserve Bank followed up a statement made by Nick Mangwana on Friday night. The original statement looked to totally ban mobile money platforms. The government was planning to take a:

“Series of prudent and coordinated interventions to deal with malpractices, criminality and economic sabotage perpetrated by the “wolves in sheep skins amongst our population””

The overwhelming consensus was that the fallout from the original plan was going to adversely affect the millions of people who rely on mobile money. After observing the public’s displeasure and maybe realising that they shouldn’t throw the baby out with the bath water, the Reserve Bank came out with a more muted version of Information Secretary Nick Mangwana’s announcement.

So… What did the RBZ statement mean for mobile money wallets?

These are the press releases from EcoCash to subscribers and other partners respectively concerning the matter:

NOTICE TO CUSTOMERS
Dear Valued Customers,

Following communication from the Reserve Bank of Zimbabwe, please be advised that with immediate effect the following changes apply:

• All Agent and Bulk Payer lines are suspended This therefore means that Cash in and Cash out services have been suspended until further notice.
However, please be advised that all other EcoCash services continue and are operating normally.

We would like to thank you our customers for all your continued support.
Live Life The EcoCash Way!
DIAL *1 51 #

Ecocash

EcoCash

NOTICE TO AGENTS, BULK PAYERS AND MERCHANTS

Dear Agents, Bulk Payers and Merchants,

Please be advised that we have received a directive from the Reserve Bank of Zimbabwe which states the following:

1.All Agent and Bulk Payer lines have been suspended until further notice with immediate effect

2. Merchant to Merchant and Merchant to Individual transactions have also been suspended until further notice.

Pay Merchant transactions continue to operate normally.

Please be also advised that all other EcoCash services continue to operate normally.

For enquiries please email: salesmanagers@cassavasmartech.co.zw
Live Life The EcoCash Way!
DIAL *151 # Live life the EcoCash way

Ecocash

Bulk payments are to stop with immediate effect.

“A Bulk Payer is any organization (for profit/non-profit) that makes bulk transfers of money to recipients using the EcoCash platform.

Recipients use their mobile numbers as accounts to receive money. This function is ideal for payroll administration, aid distribution etc”

Ecocash

This means that any business that used bulk payment to distribute salaries or make any large money transfers are no longer able to do that on the EcoCash or any other mobile money platform.

Merchants

Merchants are no longer able to move money out of their mobile wallets except sending money to the bank. Effectively businesses will no longer be able to pay employees or other businesses using EcoCash. Money has to go to the bank first. If one’s employees have no bank accounts then it’s going to be a tricky one.

Unlike the original release by Nick Mangwana, pay merchants will not be affected by the ban. Which means purchases from stores, ecommerce businesses, utilities and other goods or services will not be affected.

The statement from the Reserve Bank also said that all mobile money liquidations should be done through the bank. This means the only way money will move out of the overall EcoCash platform is through banks. An individual can send money to others, pay for stuff in stores etc but cannot ‘cash-out.’ Businesses can only receive money through EcoCash but can not utilise it directly through EcoCash. All they can do is to move their money to bank accounts.

The post What does the RBZ directive mean for EcoCash and other mobile money platforms? appeared first on Techzim.

The Reserve Bank has added more bond notes into circulation. The most recent increase came on the 19th of June where they injected ZWL$64 million. This raised the hard currency in circulation from ZWL$ 1,552 billion to 1,661 billion.

The central bank has been cautious in injecting more because there isn’t any confidence in the local currency on the market.

This recent injection buts hard currency bond notes at 11.5% of all the money available.

Both RBZ governor Dr John Mangudya and Finance Minister Mthuli Ncube have said cash will be injected into the economy on a gradual basis. 

The local currency is thus still limited in supply resulting in endless queues at banks. Consumers have also resorted to paying premiums to access cash from illegal traders.

The Herald

This most recent injection will do very little to make the lives of ordinary Zimbabweans any easier. The money that is in circulation represents only just a fraction of the money that is traded day to day.

International benchmarks say the ratio of cash in circulation to overall money supply (M3) should be between 10 percent and 15 percent.

Meanwhile, the central bank said preliminary reserve money stood at $13.90 billion as at June 19, 2020 from $13.34 billion recorded on June 12, 2020.

It said the marginal increase of 4.3 percent in reserve money over the week was reflected in increases of $417.71 million in RTGS balances; currency issued, $63.94 million; and other deposits, $86.21 million.

The Herald

When the money leaves banks, it rarely ever makes it back. A leading reason is that it makes its way to those who are unbanked. The majority of people who trade do so informally. This results in the little increments made by the RBZ not offsetting the lack of physical notes.

Increasing the supply off money may exacerbate the runaway inflation. The reserve bank has been hesitant to introduce higher denominations because of this. However, inflation is still on the rise and it’s pretty clear that there are other factors at play.

The post RBZ adds ZWL$64 million into circulation appeared first on Techzim.

The Reserve Bank of Zimbabwe is, according to the Financial Gazette, to introduce United States Dollar linked Bonds.

Now these aren’t to be confused with actual currency like that failed attempt to have a US$ placeholder they tried a few years back. These are bank bonds:

“A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). A bond could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments. Bonds are used by companies, municipalities, states, and sovereign governments to finance projects and operations. Owners of bonds are debt holders, or creditors, of the issuer. Bond details include the end date when the principal of the loan is due to be paid to the bond owner and usually includes the terms for variable or fixed interest payments made by the borrower.”

Investopedia

These are just IOUs, the Reserve bank is in essence borrowing money with these using these bonds. A bit of chatter on social media showed folks were losing sleep thinking version 2 of the ‘bond note‘ is coming.

Goods and services are most likely being quoted in US$ even those needed by the government. This is one avenue by which they can raise forex, the hope is that this is to meet their many obligations (the stand-off with civil servants comes easiest to mind).

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Foreign exchange auction results are in. The rate is sitting at US$1.00 to ZWL$65.8765 (rounded up to 65.88).

The highest bid was ZWL$90.00 and the lowest was ZWL$30.00. The weighted average was ZWL$65.8765 an increase from last week’s ZWL$63.7.

The amount allotted was US$13 602 407.84 a decrease from last week’s US$16 321 028.61. (The total bids however amounted to US$15 872 481.93 closer to last week’s figure of US$16.3, Supply and Demand?)

Check out our new Forex Rates page for the Old Mutual Implied Rate.

The post Foreign Exchange Auction results are in, “official” rate is 65.88 appeared first on Techzim.

So this happened:

DESIGNATION OF ZIMSWITCH TECHNOLOGIES (PRIVATE) LIMITED (ZIMSWITCH) AS A NATIONAL PAYMENT SWITCH
In accordance with the provisions of the National Payment Systems Act [Chapter 24:23] and the Banking (Money Transmission, Mobile Banking and Mobile Money Interoperability) Regulations, Statutory Instrument 80 of 2020 (the Regulations), the Reserve Bank of Zimbabwe (the Bank) wishes to advise the public that it has designated Zimswitch as a national payment switch with immediate effect.
All mobile money transmission providers and mobile banking providers are hereby directed to be connected to Zimswitch as provided for by section 4 of the Regulations. To ensure seamless integration, all money transmission providers and mobile money providers must complete the necessary Installation or deployment or commissioning of Infrastructure and connection protocols, credentials and documentation for connection to Zimswitch by no later than 15 August 2020.

John P Mangudya Governor 9 July 2020

The threat has come it seems

There has been talk of having one national switch for all transactions for a very long time. Such conversations started intensifying last year and it looks like the central bank has taken a definitive position. What this means is that all payments facilitators in Zimbabwe like banks, EcoCash and other mobile money wallets can now ‘talk to each other’ through Zimswitch.

The business that is affected by this the most is EcoCash because essentially everyone else is on Zimswitch. The mobile money service is a platform in itself with its own ecosystem that banks connect to on EcoCash’s terms.

Designating Zimswitch as the primitive platform that everyone else must connect to takes away incredible chunks of EcoCash’s market power. For example, nothing stops a NetOne customer from merely sticking to NetOne’s OneMoney and not open an account with EcoCash. From their OneMoney such a customer will now be able to send money to or receive it from EcoCash. OneMoney and EcoCash will thus compete on service, innovation and pricing. Of course the interconnection fees will also determine how far this becomes a reality.

We will look at this more closely as we get more details. Some questions to ask are around the fact that Zimswitch itself is a private company owned by some of the banks and a few other private owners. Is this the ideal set up?

Also read: EcoCash is under threat – gvt to blame BUT underlying problem is EcoCash/Cassava/Econet

The post EcoCash to become just a wallet, RBZ says everyone must connect to ZIMSWITCH appeared first on Techzim.

The Reserve Bank this afternoon issued a statement that made Zimswitch the national payment switch. This means that EcoCash will be relegated to just being wallet and will have to use Zimswitch as the universal transaction hub. Now, as more information about this comes out, and we see how EcoCash responds to this. Let’s have a little refresher on what Zimswitch is, how it came about and what they do.

I’m sure many of you are already familiar with Zimswitch and their services. But with every new directive issued, we seem to have to brush up on what the new thing that will be talked about, is all about.

What is ZIMSWITCH?

Founded in 1994 as a collaboration between Beverley, Barclays, CABS, Founder’s Building Society, Stanbic, and ZimBank (ZB Bank) (CBZ and Time Bank joined in 1995 and 1997 respectively). Zimswitch Technologies Private Limited is Zimbabwe’s sole electronic funds switch and clearing house.

They process domestic card based ATM (Automated Teller Machine), POS (Point of Sale) and EFT (Electronic Funds Transfer).

Timeline:

• 1994 Founding of Zimswitch
• 1995 Processing of the first Zimswitch transaction
• 1996 The first Zimswitch POS transaction is processed
• 2001 Incorporated as Zimswitch Technologies Private Limited
• 2006 Zimswitch makes the move to Postilion switch for greater efficiency
• 2012 Introduced credit push to bank and credit push to mobile also known as ZIPIT
• 2013 Introduced Vpayments, for internet shopping

Zimswitch currently has 24 members:

• Africa Century
• Agribank
• Banc ABC
• CABS
• CBZ Holdings
• Ecobank
• FBC Bank Limited
• FBC Building Society
• First Capital
• Get Bucks Microfinance
• Empower Bank
• Metbank
• MyCash
• NBS
• Nedbank
• NMB
• Standard Chartered
• Steward Bank
• POSB
• Stanbic Bank
• Success Microfinance Bank
• ZB Bank
• Telecash
• OneMoney

Zimswitch services

There are over 400 Zimswitch enabled ATMs countywide

There are over 100 000 Zimswitch Point of sale machines nationwide.

ZIPIT (Zimswitch Instant Payment Interchanger Technology) any mobile user on any network can send and recive money using ZIPIT.

Vpayments is Zimswitch’s online payment service

This was just a brief run through of what Zimswitch is and what services they offer. If you want something more in-depth can check out ZimSwitch: an update on the ZimSwitch Shared Services (ZSS) platform

The post Zimswitch: a quick refresher on what it is and what it does appeared first on Techzim.

The fourth running of the Foreign Exchange Auction has been completed and the weighted average is ZWL$68.8879. An increase from last week’s ZWL$65.88.

Which means the “official” rate is US$1 : ZWL$ 68.89

Bids:

• The Highest Rate ZWL$85.00 (down from last week’s ZWL$90.00)
• the Lowest Rate ZWL$40.00 (up from last week’s ZWL$30.00)

Allotted Amount this week was US$15 998 219.59 (Last week’s allotted amount was US$13 602 407.84)

Total bids this week amounted to US$18 719 664.64

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The Bankers Association of Zimbabwe (BAZ), whose main mandate is to support the banking business of member banks, supports the Foreign Exchange Auction Trading System introduced by the Reserve Bank of Zimbabwe (RBZ) on 17 June 2020 and became operational with effect from 23 June 2020.

The introduction of a Foreign Exchange Auction Trading System has been a key recommendation item in BAZ’s regular inputs to the Monetary and Fiscal Authorities.

In particular, the BAZ made representations on the need for an auction system for foreign currency trading during the crafting of the following policy documents: –

1. 2018, 2019 and 2020 Monetary Policies

2. 2018, 2019 and 2020 National Budgets

Our view is that the system brings transparency and efficiency in the trading of foreign currency in the economy.

The BAZ notes that so far USD56.3 million has been allotted under this system and the exchange rate which started at 57.3 and is now at 68.8879, signalling a movement in line with market conditions.

BAZ continues to call on exporters and sellers to submit their forex bids indicating the amount offered and the expected exchange rate through their respective banks.

We further call on authorities to continue providing this platform for price discovery and for all players, particularly foreign currency generators, to support the auction platform.

The BAZ stands ready to support economic activity by ensuring that its members engage in the efficient allocation of foreign currency funds through official channels.

Bankers Association of Zimbabwe

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The website of Zimbabwe’s central bank is currently down and anyone looking to access it currently can’t.

According to IsItDownRightNow – a set which highlights whether a website is accessible- the RBZ website has been down for “more than a week” now.

The only reason given on that site is that the site’s server isn’t responding. We will reach out to RBZ to confirm what the issue is.

The RBZ site is a pretty important resource for the public so one would expect that if it goes down – whatever issues are being faced would be quickly resolved. In the case that the RBZ can’t resolve the issue one would expect that they communicate. Unfortunately, they don’t seem to have done neither.

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Cassava Smartech announced that they have delayed the release of their audited financial statements for fiscal year-end February 2020. They made this announcement to shareholders citing that the delay is being caused by the “regulatory review” of one of the company’s key holdings EcoCash.

The previously mentioned regulatory review is a currency manipulation investigation being conducted by the Reserve Bank of Zimbabwe.

To revisit or, catch up on the events that have taken place surrounding EcoCash, what follows are the reasons why Cassava’s financial report has been delayed:

RBZ directs EcoCash to freeze agent accounts holding more than ZWL$100 000.00

This was a head scratching directive from the RBZ and their affiliate FIU. EcoCash and their parent company were not consulted about this, this move went on to make financial transactions not only difficult for EcoCash, businesses that rely on their services but also for individuals who no longer had access to agents. EcoCash serves the majority of Zimbabweans and this directive showed that the impact to the transacting public wasn’t weighed when the decision was made.

The pretext to all of this was that EcoCash was facilitating irregular activities (currency manipulation), which were causing the sharp decline of the local currency.

EcoCash CEO charged under anti-money laundering law

EcoCash were expected to comply and freeze agent accounts. They didn’t and went to the high court to seek a reversal of the directive. This wasn’t taken well by the authorities, and they moved to charge EcoCash, Cassava, and their leadership (EcoCash CEO Natalie Jabangwe and Director Eddie Chibi) under section 5 of the Money Laundering and Proceeds Crime Act.

The charges laid out against EcoCash were as follows:

• Failure to comply with any mandatory requirement of a circular, directive or guideline issued in terms of the Act (Item 26 of Table of Civil Infringements, AML/CFT Directive No. 2 of 2014)
• Failure to comply with any obligation relating to customer identification and /or verification (Item 2 of Table of Civil Infringements, AML/CFT Directive No. 2 of 2014
• Failure to maintain books and records as required under section 24 of the Act (Item 2 of Table of Civil Infringements, AML/CFT Directive No. 2 of 20141
• Failure to timely avail to the FIU, upon request, books and records referred to in section 24 of the Act or any information contained therein (Item 14 of Table of Civil Infringements, AML/CFT Directive No. 2 of 20141
• Failure to report a suspicious transaction as required in terms of section 30 of the Act: (Item 21 of Table of Civil Infringements, AML/CFT Directive No. 2 of 2014)
• Disclosing to a customer or to a third party that a suspicious transaction report has been, is being, or will be submitted to the Unit: (Item 24 of Table of Civil Infringements, AM L/CFT Directive No. 2 of 2014)

There is an article that we published at the time, that broke down all the charges and link to that can be found here

The mobile money ban

More of a side note to all of this, but nonetheless important. I’m sure we all remember that Friday night when Nick Magwana tweeted the statement that banned all forms of mobile money. Thankfully that sort of far-reaching measure (due mostly to public outcry) didn’t come in the form it was first announced.

The RBZ published a more toned down version of that initial statement. Not banning mobile money but forcing everyone who trades on it to liquidate through the banking system.

Again demonstrating that they weren’t thinking of what the millions of Zimbabweans would do if EcoCash was no longer operational. It was more important to have their way than it was to assess the nation’s dependency on EcoCash, and maybe finding another way.

Econet and Cassava offices searched by the police to get evidence of money laundering

Making EcoCash the scapegoat for the declining local currency has been a full time job for the financial authorities. A few weeks ago there was a search and seizure warrant that was tweeted by Jonathan Moyo which alerted everyone to what was happening. This court issued warrant gave law enforcement grounds to sift through customer information. Beyond the breach on Econet and Cassava, this is doubly worrying because the warrant put information of the majority of the public in the hands of law enforcement.

The following may not be closely related to the above, but it would be remiss of me not to mention the RBZ directive that declared ZIMSWITCH the National Switch for all transactions. This essentially puts EcoCash on the same playing field as all the other mobile money operators. At the moment it seems like the Authorities may have found a way to neutralise Econet and EcoCash. It’s also worth mentioning that the date for directive to take effect is fast approaching (15 August 2020).

In the statement published by Cassava Smartech they concluded by saying that any publication or updates will be made on, or before the 30th of September 2020.

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This week’s foreign exchange auction has been completed and the results are as follows:

• Amount Allotted US$ 18 531 336.74
• The Highest Rate ZWL$ 87.00
• The Lowest Rate ZWL$ 70.00
• The Lowest Bid Accepted Rate ZWL$ 78.00
• Total Bids: US$ 19 773 961.25

Weighted Average Rate ZWL$80.4663

The post Forex Auction number 7, rate now at 80.47 appeared first on Techzim.

One of the criticisms against the foreign currency auction introduced by Zimbabwe’s central bank some two months ago was that it was a big boys and gals club. The minimum amount of forex an entity could bid for in this auction was USD50,000.

It looks as if the central bank seeks to correct that. Here is the full statement signed by the governor of the Reserve Bank of Zimbabwe:

PRESS STATEMENT
INTRODUCTION OF A SECOND FOREIGN EXCHANGE AUCTION SYSTEM FOR SMALL AND MEDIUM ENTERPRISES

The Reserve Bank of Zimbabwe (the Bank) is pleased to advise the public of the introduction of a second foreign exchange auction system to cater for the foreign currency needs of Small and Medium Enterprises (SMEs).

The Bank would like to express its appreciation to Government for contributing foreign exchange towards the success of the foreign exchange auction system in Zimbabwe.

The second auction system shall be implemented on the following terms and conditions: –

Bidding Conditions & Qualifying Criteria
i. SME bidders shall submit their bids as individuals or firms through an
Authorised Dealer;
ii. Only bids for a minimum amount of US$2,500 and a maximum of
US$20,000 from each bidder per auction shall be accepted;
iii. All bids shall be in United States Dollars (US$);
iv. Bidders shall submit only one bid per Foreign Exchange Auction and
submission of more than one bid shall result in rejection of all bids
submitted by the concerned bidder;
v. Bids submitted by bidders that have overdue export receipts or bidders
that have not acquitted foreign payments as required by law shall be
rejected;
vi. Bids submitted by bidders with positive balances in their Nostro accounts
that are equal to or more than the bid amount shall be rejected;
vii. Bidders must submit their bids to their Authorised Dealers by 1500 hours
on every Wednesday, or if the Wednesday falls on a public holiday, on
the next business day, preceding the date of the next Foreign Exchange
Auction;
viii. Bidders must provide in their bids sufficient details of the purpose of
funds and description of goods or services to be paid for;
ix. Foreign currency shall only be allotted for the purpose for which a bid
has been made and utilising allotted foreign currency for any other
purpose shall not be permitted;
x. Foreign currency shall be allotted on the basis of bidder’s bid rate; and
xi. Foreign currency shall be allotted to winning bids according to the
Import Priority List (80% Priority Level 1 and 20% Priority Level 2).

Information to be included in Bids
2.1. Bidders shall be required to submit to their Authorised Dealer the following
information when making bids on their own behalf to the Foreign Currency
Auction System: –
i. Name of Authorized Dealer;
ii. Name of Applicant;
iii. Applicant’s BP/national identity number;
iv. Type of Transaction and sector category
v. Bid amount in US$;
vi. Bid rate;
vii. The Zimbabwe Dollar (ZW$) Equivalent;
viii. FCA Declaration; and
ix. Relevant Import Invoices.

Information to be Submitted by Authorised Dealers on the Bidding
Platform
3.1. Authorised Dealers shall submit to the Bank the following information when
making bids on behalf of their clients.
i. Name of Authorized Dealer;
ii. Name of Applicant;
iii. Applicant’s BP/national identity number;
iv. Bid rate;
v. Bid amount in US$;
vi. Purpose; and
vii. Sector Category.

Bidding Timelines
4.1. The Foreign Exchange Auction will be conducted every Thursday.
4.2. Where the Thursday falls on a holiday, the Foreign Exchange Auction will be
held on the following working day.
4.3. Cut-off time for submission of bids will be 0900 hours on the day of the Foreign
Exchange Auction.
4.4. Foreign Exchange Auction results will be released and published by 1630 hours
on the Foreign Exchange Auction day.

Settlement
5.1. Payment of winning bids will be made through the Zimbabwe Transfer and
Settlement System (ZETSS) on a T + 1 basis.
5.2. The Bank will transfer the foreign currency to the Nostro Account of the winning
bidders’ Authorised Dealer, after receiving the ZW$ equivalent. In line with
international best practice, settlement of funds transferred to the Nostro
Account will be on a T + 2 basis.

Market Discipline
6.1. Any entity found to be flouting the rules of the auction should be disqualified
from participating on the Foreign Exchange Auction.
6.2. The Exchange Control flagging system will be used to identify delinquent
participants and as a result:
• Bids by Red Flagged entities with overdue Forms CD1 shall be disqualified
at the Authorized Dealer level. Entities must comply with regulations
applicable to the repatriation of export proceeds to the country:
• Entities with overdue and unacquitted Bills of Entry, shall be disqualified;
and
• Third party bidding shall not be permitted.

Publication of Results
Below is the information that will be availed to the public after every Foreign
Exchange Auction: –
i. Amount on Offer (US$);
ii. Total Number of Bids;
iii. Total Amount of Bids Accepted (US$);
iv. Amount Allotted (US$);
v. Rejected Number of Bids; and
vi. Weighted Average Auction Rate ZW$/US$.

Conclusion
8.1. The introduction of the SMEs Foreign Exchange Auction System is primarily meant to enable this sector to access foreign currency for the import of essential services and raw materials for their businesses.
8.2. It had become clear that the SMEs sector had been crowded out of the foreign exchange space by the big players. The Foreign Exchange Auction System shall continuously be fine-tuned in order to ensure that it best serves the interests of the economy.

Reserve Bank of Zimbabwe

It’s not clear which exchange rate will become the official exchange rate: the one derived from the big boys and gals action, the one from the smaller players’ auction or some combination of the two?

This is where we argue that the authorities cannot claim that the country has one true rate. Besides the existence of 2 official auctions now, the problem of an importer having to bid high to get forex to import merchandise and then being forced to price that merchandise at a lower average rate has not been solved still.

Let’s hope for the best and expect the worst; that’s always the best wisdom to navigate the Zim economy.

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