State Media|Banks and money transfer agencies traded accusations in Parliament on Monday over an uneven playing field.
Bankers Association of Zimbabwe (BAZ) accused money transfer agencies such as EcoCash, One Money and Telecash of enjoying an unfair advantage over financial institutions.
This came out during a meeting convened by the Parliamentary Portfolio Committee on Budget and Finance chaired by Chikomba Central MP Felex Mhona (Zanu PF), who had invited banks, money transfer agencies, business and industry to hear their views on how the economy could be improved.
During the meeting, BAZ chief economist Dephine Mazambani said money transfer agencies were regulated by the Postal and Telecommunications Regulatory Authority of Zimbabwe, while banks were regulated by the Reserve Bank of Zimbabwe (RBZ), but yet both provided similar services of collecting and dispensing money.
“Money transfer agencies and banks are not regulated the same way,” she said. “We are regulated by the RBZ while they are regulated through Potraz.
“Our regulation terrain is different, but one of the key challenges is that while we are regulated differently, sometimes you see that we offer similar or the same products or services which creates an uneven playing field and sometimes pose a risk to the financial sector, seismic risks. It is the regulatory environment that we are hoping that can be levelled.”
Cassava Smartech Zimbabwe chief executive Mr Eddie Chibi, which owns EcoCash, said Mrs Mazambani’s views were misdirected.
“EcoCash is under the direct oversight of RBZ,” he said.
“We are regulated under the National Payment System Act and we make as frequent returns and engagement with the central bank as any other financial services sector in Zimbabwe, including banks.
“For certain services, we are also regulated by the RBZ Financial Intelligence Unit where we submit all our suspicious transactions reports and other general issues which we pick. We have invested in a robust system which tracks transaction in terms of any suspicions of fraud and money laundering which we share with the RBZ on a regular basis.
“In terms of our remittances services, we also get regulated by the Exchange Control division of the RBZ, including the licence which we have for the EcoCash Bureau de Change.”
Zimbabwe National Chamber of Commerce representative, Mr Archie Dongo called on Government to narrow the gap between cost of subsidised products and the price on the market to avoid arbitrage.
He said while subsidies were meant to address affordability of products and services, there was need to rationalise the cost of the end product and how much the market was charging.
“We fully understand the thrust of subsidising certain products for the benefit of the general populace, particularly in an era of austerity,” said Mr Dongo.
“The demand that has been created by lowering of prices is quite high, but the supply has been reduced or is inadequate, for example, when you use Zupco, the queue will tell a story that not everybody who wants to use Zupco will be able to use it.
“The gap between subsidised price and market price is rather wide. The gap is creating very lucrative arbitrage opportunities for some people.”