Staff Reporter|Reserve Bank of Zimbabwe governor John Mangudya announced a plan to separate local and foreign currency bank accounts which he ordered banks to implement by 15 October 2018 latest.
Mangudya made the announcement when he presented his monetary policy statement in Harare on Monday.
“In February 2018, the Bank introduced a policy that requires banks to ring-fence foreign currency for foreign exchange earners that include international organizations, diaspora remittances, free funds, export retention proceeds and loan proceeds,” said Mangudya.
“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. With immediate effect, all banks are therefore directed 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.”
Accordingly all banks are directed to use their know-your-client (KYC) principles to comply with this directive to separate the accounts without requiring their clients to complete any other documentation other than for new bank accounts. Banks have been provided with a period of up to 15 October 2018 to fully comply with this policy measure.”
“Banks are also expected to provide reasonable deposit rates on the Nostro
FCAs in line with international best practice on such accounts.
This policy measure is expected to encourage exports, diaspora remittances, banking of foreign currency into the Nostro FCAs and to eliminate the commingling or dilution effect of RTGS balances on Nostro foreign currency accounts.
The relationship between the two categories of the FCAs shall continue to be at parity. This is essential in order to preserve value for money for the banking public and investors during the
transition to a more market based foreign currency allocation system that shall be implemented once the economic fundamentals are appropriate to do so.”