RBZ deploys crack team on retailers
Golden Sibanda Senior Business Reporter
THE Reserve Bank of Zimbabwe says it has deployed teams on the ground to deal with issues of indiscipline by some traders who have insisted on multi-tier pricing for different modes of payment.
RBZ Governor Dr John Mangudya said they were working on reining in errant traders in line with provisions of the Bank Use and Promotion Act, amid concern some retailers continue to hoard cash and illegally trade in foreign currency.
“Our teams are working on the issues of indiscipline being perpetuated by some traders. We have since established a hotline for the public to report to the Reserve Bank instances of such malpractices for a reward of 5 percent of reported and recovered funds.”
Some errant retailers have continued to engage in multi tier pricing of goods for the different forms of payment across the country despite repeated warnings from the central bank that they risk arrest as the practice was in violation of the banking legislation.
In terms of banking cash or proceeds of business, the law says “Every trader and parastatal shall, unless it has good cause for not doing so, deposit in an account with a financial institution no later than the close of normal business hours on the day following that on which the cash is received or on the next banking day.”
The Act also says “No person other than a financial institution or moneylender shall exchange any negotiable instrument for cash at a premium.” Where this is allowed, it must be within confine of the law.
In a bid to entice customers to use cash, some traders pegged steep prices or charge a premium for payment modes other than cash. In other instances, the traders do not bank proceeds from their activities, a situation that has worsened prevailing cash shortages.
According to the Bank Use Promotion Act (Chapter 24:24), it is an offence to use different pricing models for different payment systems namely cash, Real Times Gross Settlement (RTGS), internet and Point of Sale or a combination of any two or more of them. The same Act also prohibits hoarding cash and not banking it.
The central bank has since called for increased use of other approved alternative forms of payment in the wake of the widespread shortage of cash due to high demand against limited inflow.
This is because Zimbabwe uses a basket of foreign currencies, mainly the dollar, which is in high demand globally and is therefore easily externalised while its high import bill also causes the little available hard currency to find its way out of the country.
The central bank said last week that it was putting in place measures to promote the use of plastic money and other platforms, make them cheaper and more attractive than using cash.
Plastic and electronic platforms currently account for 70 percent of retail transactions. Intended measures include downward review of charges on plastic money and electronic transactions.
Confederation of Zimbabwe Retailers president Denford Mutashu said Government should punish retailers found on the wrong side of the law, as RBZ had warned retailers against any malpractices.
He said while the majority of CZR members were now compliant with the law, there still were pockets of errant operators who need to be reined in. He said CZR will not defend any offenders.
“It is unfortunate that we continue to witness market indiscipline yet when such retailers open businesses in other countries . . . they follow the law to letter. The Government of Zimbabwe has done its job to create a good business environment and retailers should not be seen to be taking advantage of a situation where business wants to self regulate,” he said.