Zimbabwean banks are seeking approval from the Central Bank to slash cash withdrawal limits to $500 per week in an effort to stem the worsening cash crisis.
Barclays Bank Zimbabwe managing director George Guvamatanga told a Catholic Archdiocese of Harare-organised meeting in Harare yesterday that the present cash limit was unsustainable.
Despite claiming the daily cash withdrawal limit is $1 000, most international banks have been limiting withdrawals to $500, with some even reducing daily limits to $300 while indigenous banks are disbursing as little as $20 per day..
“…I have a client who has been withdrawing $1 000 everyday since the new limit was imposed,” Guvamatanga said. “To date, the client has withdrawn $11 000 and still counting. In light of such situations, I therefore call upon the central bank to impose a $500 weekly withdrawal limit. The average Zimbabwean deposit is $374 so this limit would be sufficient.”
Reserve Bank of Zimbabwe governor John Mangudya said he would look into the request.
“We will consider the $500 weekly limit as a proposal. When we put in place the $1 000 limits, we had taken into consideration factors like the country’s present Point of Sale (Pos) network, which is still poor,” Mangudya said.
This comes as bankers are facing chaos at bank counters as alarmed depositors withdraw funds from accounts. Following the recent cash challenges, most Zimbabweans had turned to supermarkets for cash-backs as a withdrawal means, but some supermarkets have shut down the option.
Desperate for cash, Zimbabwe’s financial institutions are now even pleading with deep-pocketed clients to supply them with cash in a move aimed at replenishing their nostro accounts as the country continues to grapple with a biting liquidity crunch.
Government has been encouraging the use of plastic money in view of the cash shortages, but Guvamatanga said the central bank had to regulate the fees governing Pos machines.
“If as a country we are serious about the use of plastic money something needs to be done about the fees. At $2,50 in charges, swiping for a $2 purchase makes very little sense.
“As bankers, we are looking into this, even the $10 Real Time Gross Settlement becomes ridiculous, it is just too much,” Guvamatanga said.