THE Reserve Bank of Zimbabwe (RBZ)’s currency changeover deadline has created turmoil on the market amid fears that many institutions will not meet it.
It emerged this week that the central bank was under immense pressure to extend a
n arbitrary August 21 deadline for banks and shops to get rid of all old bearer cheques. The central bank is in a mad rush to mop up the old bearer cheques amid revelations that there are still many people, especially in the remote parts of the country, still holding on to large sums of old money.
The RBZ this week issued a subtle warning to businesses it claimed continued to give out large volumes of old bearer cheques to the public.
“The Reserve Bank has noted with concern that some major cash movers in the economy have continued to inject large volumes of old bearer cheques into circulation not withstanding the bank’s call that stakeholders now move to the new family of bearer cheques,” the RBZ statement said.
“Instances where some players collect the new cash from the Reserve Bank and elect to hoard it at their cash depots, will not be tolerated, and a bank or non-bank financial institution, caught doing such abortive (sic) practices will be dealt with accordingly.”
The threat against banks was seen as a preemptive strike against institutions seen as sabotaging Reserve Bank governor Gideon Gono’s currency reforms that came unannounced and have caused turmoil in both the banking sector and the transacting public.
Banks have been forced to incur huge expenses in efforts to configure their automated teller machines to dispense the new currency while the RBZ has embarked on an extravagant publicity campaign to educate a bemused public.
The statement on Wednesday was seen as targeted at banks and retail outlets that continued to disburse old money. The statement also raised fears that the new bearer cheques distributed in the past two weeks could have been hoarded just like the old bearer cheques.
The RBZ was yesterday forced to extend the deadline to remit the old bearer cheques for banks, traders and parastatals to Tuesday. A circular issued yesterday afternoon said banks were allowed to take deposits of the old currency from parastatals, traders and retail shops until Tuesday.
Sources said the RBZ, despite assurances, had not printed enough new bearer cheques to meet a huge demand expected around month-end next week.
Fears of chaos heightened after banks announced that they would shut down on Saturday to convert their systems ahead of the deadline. Stanbic, ZABG Bank and FBC Bank have since confirmed that they will be closed on Saturday. The RBZ has however ordered banks to remain open to allow customers to swap old bearer cheques for new ones.
Most banks are also planning to switch off their automated teller machines (ATM) during the weekend, against an RBZ directive to continue ATM services.
The ATM services will resume on Monday. That means there will be no banking business tomorrow, leaving customers with only Monday to offload their old currency into banks.
The extension of the deadline — which indicated a climbdown — came on the back of pressure from banks which complained to Gono over the tight deadline.
With three days to go, some banks were still issuing old bearer cheques while retail shops continued to give customers change in the old currency. Retail shops have since announced that they will stop accepting the old currency on the August 20 (Sunday).
Others have said they will stop accepting the old currency today.
“There is panic now that we realise that the teams that we thought would cover rural areas have not been able
to do so,” said an official in the central bank’s financial markets division.
TM supermarket personnel said they had a directive to stop accepting old bearer cheques on Sunday.
“Management told us that the cut-off date for accepting old notes would be Sunday August 20,” an official at TM High Glen said.
Management at OK and Bon Marche however said they would be taking the bearers cheques until the end of day on Tuesday, the deadline for the change-over period.
Shop attendants at two designer wear shops housed at the Kopje Plaza building said they would not be accepting old bearer cheques from tomorrow to avoid losing out if they fail to bank their takings before Monday.
“As from Saturday we will not be accepting old bearer cheques. If you want to buy something here with the old bearer cheques that must be done by Friday (today)”, said a shop attendant at one of the shops.
Another shop attendant at a leather goods outlet along Jason Moyo Avenue said the company was advising people to buy using new bearer cheques, as they are yet to get explicit instructions from their management.
Zim’s currency since 1980
* 1980 — Zimbabwe had six coins and four bank notes. The coins were: 1c, 5c, 10c, 20c, 50c, and $1 in coins and $2, $5, $10, $20 notes.
* 1994 — the Reserve Bank introduced a new $50 note followed by a $100 note in 1995.
* Between 1997 and 1998 new notes were introduced of: $5, $10, and $20, plus a $2 coin.
* 2001 — a $500 note was issued followed by another different $500 note. A $5 coin was also introduced the same year.
* In 2003 a $1 000 note came into circulation.
* The RBZ introduced traveller’s cheques as legal tender in 2003 in denominations of $1 000, $5 000, $10 000, $20 000, $50 000 to $100 000. They proved unpopular with the public and were quickly phased out.
* RBZ introduced bearer cheques for the first time in September 2003 in $5 000, $10 000 and $20 000 denominations.
* A $50 000 bearer cheque came in on February 1 2006.
* RBZ introduced the $100 000 bearer cheque on June 1 2006.
* August 1 2006 RBZ introduced a batch of 13 new bearer cheques after knocking off three zeros from the old bearer cheques. The new bearer cheques are in the following denominations: 1c, 5c, 10c, 50c, $1, $10, $20, $50, $100, $500, $1 000, $10 000, $100 000 — all in paper format.
* Gono last week said there were plans to introduce a new currency in the near future.