RBZ increases cash withdrawal limits
The Reserve Bank of Zimbabwe (RBZ) has increased cash withdrawal limits for different categories of banking clients, according to a memo seen by this publication.
The memo, from the central bank’s Financial Intelligence Unit (FIU) to all banks, directed banks to increase cash withdrawals for individuals from $5 000 to $15 000 per week.
Withdrawal limits for corporates have been raised to $100 000 from $20 000. Hospitals and clinics can withdraw up to $500 000 per month while the limit has been set at $1 million for local authorities.
Individuals and corporates have the option to withdraw the maximum weekly amount in a once-off transaction or in lesser amounts that shall not exceed the stipulated limit.
Courts, the Parliament, and international organisations are not subjected to withdrawal limits.
“In order to efficiently serve the banked customers, the Financial Intelligence Unit has come up with several cash withdrawal limits that banks should apply when processing cash withdrawals for their customers,” FIU director general Oliver Chiperesa said in the memo dated February, 9, 2023.
“Banks may allow the customer to withdraw the amount in a once-off transaction for the week or month, or in lesser amounts, in the aggregate, and shall not exceed the set limit in week or month. Banks are required to undertake due diligence when processing cash requests for customers to ensure the facility is not for criminal activities.
“Where a customer has a valid need to withdraw cash above the stipulated limit, the bank shall continue to submit such applications to the FIU, clearly setting out the special grounds for the request. The FIU will not grant any such request unless satisfied that no other forms of payment are reasonably available to the customer.”
Over the past few years, the economy has registered a sustained increase in the usage of electronic payments, which has brought convenience to the transacting public, which is now less dependent on cash. “People are now transacting using mobile platforms as opposed to holding cash and this is in line with global trends,” Carlos Tadya, a Harare-based economist said in an interview yesterday.
“In addition, the growing use of the US dollar puts less pressure on demand for Zimbabwe dollar cash so even though the new limit appears to be low, I think they are fair.
Last week, the Zimbabwe National Statistical Agency (Zimstats) said nearly 80 percent of local transactions were now in foreign currency.
Last year, the Government enacted legislation to entrench the multi-currency system, which makes both the United States and Zimbabwe dollars legal tender for all local transactions for the duration of the National Development Strategy 1 (NDS 1), the country’s medium-term economic blueprint, which runs until 2025.
Before the enactment of the law, the Government had already legalised the use of foreign currency for local transactions in March 2020 at the height of the Covid-19 pandemic
There has been phenomenal growth in the use of US dollars including loans to corporates and individuals, payments of utility bills and local authorities, and salary payments.
The US dollar-based retail transactions also increased after the narrowing of the gap between black and official exchange rates since August last when the Government put in place several measures to stabilize the local currency and tame inflation.