ZIMBABWE’S largest mobile money transfer service, EcoCash, has filed an urgent chamber application at the High Court for an interdict against a directive by the Reserve Bank of Zimbabwe (RBZ) to freeze the accounts of its agents.
The central bank on Monday directed all banks in the country to freeze more than 100 bank accounts linked to either EcoCash and OneMoney agents suspected of involvement in illicit foreign currency transactions or money laundering.
The freeze was with immediate effect.
However, in a court application filed on Wednesday, EcoCash, through its lawyers Mtetwa and Nyambirai Legal Practitioners, filed an urgent chamber application seeking a temporary interdict to suspend the enforcement of the directive issued by the central bank.
“On May 4 2020, the respondent issued a directive to the applicant whose effect is that the applicant must suspend and freeze the EcoCash accounts of agents whose transactional values exceed ZW$100 000 per month,” reads the application.
“The respondent further placed a condition that those affected agents who wanted to continue with agent business must reapply and the application will be subject to confirmation by the respondent.”
EcoCash, whose parent company is Econet, said its agents were not heard before the decision to suspend and freeze the accounts was made.
“The provisions of Section 10 of the Act that the respondent placed reliance on do not give the respondent powers to suspend the agent from participating in the EcoCash system. No crime has been alleged against the agents and, when considered together with all the relevant facts, the directive is illegal and irrational,” reads the application.
EcoCash said it has 11 million registered customers in a population where less than half the population have bank accounts.
It provides service to the majority of the people who do not have access to bank accounts and most of whom are in the rural areas.
“The directive severely prejudices the majority of the Zimbabwean population, the applicant, its customers and the affected agents in several ways. This application is intended to temporally arrest the prejudice by suspending the operation of the directive of 4 May 2020 pending a determination of its legality on the return date,” the application reads.
In his founding affidavit, EcoCash chief executive officer Eddie Chibi said they need a temporary interdict to suspend the enforcement of the directive issued by the central bank; a temporary order for the authorisation of it to uplift all the restrictions imposed on the accessibility of the EcoCash system and accounts by its agents in terms of the directive issued by the respondent on May 4 2020, and to restore all functionality to the affected agents.
On the return date, EcoCash wants a final interdict to stop the enforcement of the directive as well as an order declaring that the RBZ does not have authority in terms of Section 10 of the National Payment Systems Act (Chapter 24: 23) to make any directives against the management and the participants of a mobile money payment system without affording them the right to be heard. EcoCash also wants the directive to be declared null and void and consequently be set aside.
EcoCash currently has 53 924 agents across the country.