Banks revert to $50 withdrawal limits: Standard Chartered cancels Visa cards

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Bianca Mlilo, Business Reporter
SOME local banks have reverted to the $50 withdrawal limit per day citing continuing cash shortages.

This is in defiance of a recent Reserve Bank of Zimbabwe (RBZ) directive to have a minimum withdrawal pegged at $100 per day following the injection of more than $80 million worth of bond notes into circulation.

Although authorities say there is an increase in the use of plastic money and other electronic transactions, queues continue to be the order of the day at most banking halls as more depositors seek hard cash.

Last week the apex bank injected an additional $15 million worth of bond notes in the $5 denomination. This followed earlier tranches of $2 denominations worth more than $70 million since the end of November 2016.

The new notes were envisaged to improve liquidity and ease demand for foreign exchange. However, a snap survey conducted by Business Chronicle in Bulawayo yesterday revealed that depositors were still getting a raw deal from banks. Several banks such as CABS, ZB, National Building Society and Standard Chartered had reverted to giving $50 per day in either bond notes or United States dollars while some had run out of cash, forcing depositors to spend hours in queues. Met Bank was only giving $300 weekly withdrawals.

A ZB bank official who requested anonymity said they were reducing the withdrawal limits based on a day to day assessment of the queues.

On days when banks are congested, he said, bank withdrawal limits will be significantly reduced.

“We apply withdrawal limits at different times of the month, based on how many depositors would have come through on that day,” said the official.

“When it’s pay day for civil servants and pensioners we have many people coming in so giving them huge amounts of money would not be practical. But come mid-month we can give out as much as $300 (weekly withdrawal limits) at one go.”

A CABS official said they did not have enough money hence they were forced to implement limits on withdrawals to ensure that they remain in business.

Zimbabwe has been battling cash shortages since last year, a trend that authorities blame on externalisation of foreign currency, hoarding and other illicit financial outflows. The strengthening of the US$ against regional currencies over the years has also worsened the situation by increasing demand for the greenback.

Meanwhile, Standard Chartered Bank Zimbabwe has immediately disabled the use of its Visa cards outside of Zimbabwe.

The bank, however, said it was open to advance applications for the cards’ use, provided the application is accompanied by all relevant documents, which “confirm travel dates and expenses expected to be incurred.”

“This decision has been taken to ensure best use of the increasingly scarce foreign currency reserves which is disbursed in line with the priority list issued by RBZ if and when available,” said StanChart in a statement.

In view of foreign exchange shortages, several banks such as FBC, CBZ and MBCA recently announced that they had disabled Visa and Mastercards.

This has been linked to depletion of nostro reserves, which are funds for local banks held in foreign accounts.

@BiancaMlilo

Article Source: The Chronicle