Exporters who had foreign currency balances with their banks before February 28, 2018 can still claim their money in foreign currency from their banks, if they did not use the funds for any other transactions afterwards, a senior officer with the Ministry of Finance and Economic Development has revealed.
In a directive issued to banks in February 2018, the Reserve Bank of Zimbabwe (RBZ) ordered banks to ring-fence foreign currency for foreign exchange earners in separate accounts from other locally generated funds as a way of, among other things, promoting confidence within the economy.
But for some reasons, banks did not comply with this directive leading to affected exporters flooding the central bank with complaints, an issue the apex bank sort to bring to an end in its mid-term Monetary Policy Statement presented in October 2018.
Said RBZ governor Dr John Mangudya in his 2018 mid-term Monetary Policy Statement:
“In February 2018, the Bank introduced a policy that requires banks to ring-fence foreign currency for foreign exchange earners that include international organisations, diaspora remittances, free funds, export retention proceeds and loan proceeds.
“Numerous enquiries received by the Bank point to the fact that this policy has not been implemented by some banks on a transparent basis that promotes confidence within the economy,” said the central bank governor.
With immediate effect, Dr Mangudya directed all banks to effectively operationalise the ring-fencing policy on nostro foreign currency accounts by separating foreign currency accounts (FCAs) into two categories, namely Nostro FCAs and RTGS FCAs.
Dr Mangudya provided banks with a period of up to October 15, 2018 to fully comply with this policy measure.
But several months down the line some depositors are struggling to access those funds in foreign currency and are being told they will get the local dollar equivalent at the interbank rate.
Midlands poultry farmer Trevor Shaw, raised the issue at the recently held Midlands Devolution and Investment Conference hosted by Business Weekly that he had found no joy with his bankers over foreign currency balances held prior to February 2018.
Shaw is a poultry farmer and one of the major horticulture products exporters.
“The bank is insisting that they give us the amount at 10:1 (closer to the US$/ZWL$ exchange rate,” said Shaw.
But according to Chief Director, Communications and Advocacy with the Ministry of Finance
Clive Mphambela, the exporters should be able to get back those funds in foreign currency.
“The law was very clear. When the governor (Dr Mangudya) made that policy pronouncement in February last year, banks were supposed to start ring fencing, for purposes of identifying export proceeds as compared to local remittances. So banks were supposed to do that.
“What basically the bank customer is supposed to do in those instances is to actually go back with “a bank statement, which particularly applies to those customers that never actually transacted over those accounts,” said Mphambela.
He said if export proceeds came before February 2018 and were not withdrawn or used for any other transactions, the banks were supposed to ring-fence it and should make it available to the depositors.
“You can still get it back. All you need to do is to write to your bank, and then you copy that letter to the reserve bank and the issue will be resolved,” said Mphambela.
However, according to Henry Nemaire, chairperson of Confederation of Zimbabwe Industries (CZI)’s trade committee said there aren’t many cases where exporters had faced such challenges.
“Maybe it’s just a few individuals whose banks themselves are illiquid and could not deliver on the promise. If that is indeed happening, then it’s a clear case of banks abusing client’s funds and then hiding behind a policy change.
“Because it was very clear using KYC how banks were supposed to separate these accounts and each client already knew precisely how much, to the dollar, the amount they had in banks,” said Nemaire.