INDIVIDUALS with nostro foreign currency accounts (FCAs) in Zimbabwe are failing to withdraw US dollars from banks, a development which undermines public confidence and trust in the financial system.
FCA holders with Zimbabwean banks have expressed apprehension over what they fear could lead to a raid on their funds by the government.Forex availability has been a problem in the country, whose productive sectors continue to encounter headwinds amid a Covid-19 pandemic, a huge import bill for fuel, medicines and raw materials for industry.
This has worsened in recent weeks, as FCA account holders have begun facing challenges in withdrawing hard cash.Harare resident Fidelis Matiashe, who banks with a local commercial bank, said he has been trying to withdraw forex from his bank with little success.
“I went to withdraw my money yesterday (Wednesday) as I have done over the years, but on Wednesday they told me that I will not be able to withdraw my money because it was sent via a transfer,” Matiashe said.
“I tried to engage the bank over the matter with a view to understanding whether it was their new policy to do that, but I couldn’t get a proper answer.”
Another FCA account holder with different commercial bank, Zenzeleni Vuma, said he was also turned away by his bank with “obscure” explanations.
“It’s really frustrating, especially after the government has allowed people to use forex to transact in the country,” he said.
Economist Godfrey Kanyenze said the development would simply undermine public confidence in the banking system.
“It simply undermines the confidence and trust because banking normally operates on the basis of the law and numbers such that when you go to a bank you should not be having a challenge getting your money because it’s not everyone who will go at the same time,” Kanyenze said.
“But if everyone is going at the same time to the bank and they are trying to withdraw cash, then it tells you there is a run on the bank, then there is a problem. In Zimbabwe, trust is critical. Trust and confidence are critical issues.”
“It’s very delicate. If they do that (not allowing withdrawals) it basically creates a real challenge for the transacting public because these are free funds. Otherwise it creates a crisis,” he added.
Efforts to get a comment from Reserve Bank of Zimbabwe (RBZ) governor John Mangudya as well as Bankers’ Association of Zimbabwe president Ralph Watungwa were fruitless.