Man in court for triggering BancABC VISA card crisis that caused hell for thousands

HARARE – A man appeared in court on Wednesday accused of causing a banking crisis that forced BancABC to temporarily suspend its VISA cards for thousands of customers in October.

Malvin Kudakwashe Serima, 24, of Chitungwiza was not asked to plead to charges of money laundering involving US$120,000 during a brief appearance before Harare magistrate Yeukai Dzuda.

He was remanded to Thursday for a bail hearing.

BancABC customers in six African countries faced hell in October and into early November when the bank suspended all VISA transactions. Online payments and swipe services were later restored, but the bank is still not allowing withdrawals from the pre-paid cards.

The National Prosecuting Authority on Wednesday revealed that the trigger for the crisis which frustrated BancABC customers, especially those travelling or living abroad, were suspicious transactions in late October in which large amounts of cash were deposited in Zimbabwe and then attempts made to withdraw it in foreign countries.

Thomas Chanakira, for the prosecution, said Serima opened two VISA card accounts with the bank which have a lower threshold for know-your-customer rules because they are pre-paid.

Subsequently, he deposited US$10,000 into the first card and US$110,000 into the second.

The NPA says Serima then passed on the two cards and their PIN numbers to Talent Kamupupu and Paminous Mutengwa, who are both wanted by the police.

Within hours, Chanakira said, US$8,400 was withdrawn from the first card and US$9,530 from the second from a cash machine in the Ivory Coast.

“Both transactions were ATM cash withdrawals, a trend that is synonymous with money laundering,” said Chanakira.

The transactions were immediately flagged by BancABC’s risk department which also alerted VISA International and the Reserve Bank of Zimbabwe.

The court heard that Serima failed to declare the source of the funds.

In total, BancABC said it had identified 11 cards that were used in suspicious transactions, all connected to the same group of customers.

The court heard that the US$102,000 that was yet to be withdrawn has been frozen by Visa International.

BancABC CEO Lance Mambondiani on Wednesday said the decision to suspend withdrawals, whilst regrettable, was their only option to avoid further exposure.

“We first needed to establish how far the exposure goes because we have banks in six countries all sitting on the same VISA platform. We’re quietly satisfied that we have identified the weakness in the system and are hopeful that, working with VISA International, we can restore the cash withdrawal service in the next few weeks,” Mambondiani told ZimLive.

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