FACT CHECK: Has RBZ banned forex cash withdrawals from FCAs? - ZimFact
Ngoni Mhuruyengwe
June 26, 2019
CLAIM: On June 25, the website The Tabloid Zim reported that the Reserve Bank of Zimbabwe (RBZ) had ordered an end to withdrawals from Foreign Currency Accounts (FCAs).
According to the website: “The accounts will not be closed, but however no cash withdrawals will be allowed,”
VERDICT: FALSE
By ZimFact Staff
Basis for the claim
On Monday, June 25, the Ministry of Finance, Mthuli Ncube, issued Statutory Instrument 142 of 2019, which ended the use of multiple currencies as legal tender. Following the notice, the Zimbabwe dollar became the sole legal tender for all local transactions.
On Tuesday, June 26, the Reserve Bank of Zimbabwe issued Exchange Control Directive RU102/2019 to banks, which gave directives on the implementation of SI142/2019. One of the major directives relates to withdrawals from FCAs.
According to Section 4 of the directive, which relates to Foreign Currency Cash withdrawals, the withdrawal of foreign currency cash by corporates, which was previously unconditional, would now be subject to banks’ internal authorisations.
According to Section 4.1: “Authorised Dealers are advised that unconditional authorization for foreign currency cash withdrawals by corporates has now been removed. However, withdrawals by the same on deserving cases such as road toll fees are now permissible only on a case by case basis subject to the application of Know Your Customer (KYC) and Customer Due Diligence (CDD) principles on the withdrawer. These principles to be applied should be in line with Anti-Money Laundering and Counter Finance of Terrorism AML/CFT regulatory requirements and best practice.”
This clause was widely interpreted as a ban on cash withdrawals by holders of all FCAs. This is false.
Under Section 4.3 of the directive, the RBZ states: “For individuals, the current policy shall remain in force with Authorised Dealers also required to apply the usual KYC and AML/CFT standards.”
On June 26, the Reserve Bank of Zimbabwe Governor, John Mangudya, told ZBC that there had been no change to the policy of allowing individual holders of FCAs to withdraw foreign currency cash from those accounts.
Are remittances being paid out in Zimbabwe Dollars?
A further claim that remittances are now paid out in Zimbabwe Dollars is also false. Under the directive, a recipient can receive their remittance in foreign cash, sell it to Bureaux de Change or a bank, or deposit it into an individual FCA.
Section 15.1 of the directive states: “In order to encourage and facilitate the flow of foreign currency, diaspora remittances shall continue to be received in foreign currency. The recipients shall have the option to receive remittances in cash or sell their remittances on a willing seller willing buyer basis to Bureaux de Change and Authorised Dealers or deposit into Individual Nostro FCA.”
Remittance outlets, Western Union agent Homelink and Mukuru.com, announced on their official Twitter accounts that they continued to pay out in foreign currency.
CONCLUSION
The Reserve Bank of Zimbabwe has not banned foreign currency cash withdrawals from individual FCAs. Withdrawals by corporates from their FCAs are now subject to authorisations by their respective banks.
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