ZIMBABWEAN bankers are fretting over compliance with government directives to root out “illegal foreign currency dealings”, with the country’s biggest bank, CBZ, cautioning its employees against facilitating such deals as well as instructing them to report all suspicious accounts and transactions.
This follows a meeting of the central bank and business leaders, including representatives for banks, on Monday. Sources who attended Monday’s meeting said the governor blamed the banks for not reporting suspicious transactions.
Said a finance manager at a foreign-owned finance institution:
“We are under pressure as an industry to do something. The governor and other government officials are already exerting pressure on the industry to play a role in shielding the local currency and to protect the official foreign exchange market and that’s why banks have started to issue these cautions to employees.”
CBZ Bank group chief compliance officer Matthew Manyati and managing director Peter Zimunya said in a 12 October circular to all departments that staff members were being
“advised to desist from participating in illegal foreign currency transactions, either on behalf of clients or for their own personal” benefit.
“Disciplinary action shall be taken against any staff member who breaches the contents of this Instruction Circular hence staff members are encouraged to use the legally designated channels to access foreign currency,” further reads the circular.
The Zimbabwean central bank and the Financial Intelligence Unit had
“cited great concern on the number of CBZ clients who are advertising parallel foreign currency transactions on different social media platforms”, highlighting that this in turn was “fuelling exchange rate distortions”.
CBZ has thus instructed its workers to
“identify any persons advertising parallel foreign currency transactions using the CBZ name” on social media.
The Reserve Bank of Zimbabwe – which has already blacklisted 77 individuals for money laundering – charges that some bank clients are openly advertising illegal parallel market forex rates on social media platforms quoting specific bank platforms.
This, authorities in Harare argue, has resulted in price increases and a widening of the gap between official and unofficial forex rates.
The Zimbabwean dollar was on Wednesday trading around 1:175 against the US dollar on the parallel market compared to 1:90 on the official auction market, which has been sluggish.
In a communique released after the meeting on Monday, the central bank said the Zimbabwean bankers had committed to
“enhancing reporting of suspicious transactions” as well as “promptly implementing regulatory directives on freezing of bank accounts for participants in illicit foreign currency transactions”.
The FIU has separately directed local banks to institute monitoring measures aimed at rooting out bank accounts and debit cards that are being used for foreign currency dealings.
“Banks should implement a robust automated transaction monitoring mechanism to identify debit cards and the linked bank accounts that are being used frequently and in a pattern that raises suspicion. Banks must carry out further analysis to establish the source of funding into the accounts,” the FIU said in a notice to banks.