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Top Banks, Firms Penalised For Failing To Account For USD Sourced From RBZ's Auction System

Top Banks, Firms Penalised For Failing To Account For USD Sourced From RBZ's Auction System

The Reserve Bank of Zimbabwe (RBZ) has penalised top banks and firms for violating exchange control regulations with some companies failing to account for United States dollars sourced from the central bank’s foreign auction system.

In a confidential RBZ report dated September 5 2022, RBZ’s Exchange Control Division wrote that it conducted on-site compliance inspections across the country to check how the firms were using funds from the auction.

The apex bank launched the foreign currency auction system in June 2020 and over US$3.5 billion has been extended to support key imports of raw materials and machinery.

There have been reports of companies and some individuals, who have abused the auction system for profiteering and arbitrage. However, the RBZ has consistently fought a vicious war with errant banks and companies.

In the report submitted to the Finance and Economic Development ministry this month, the central bank said it slapped penalties on importers who could not account for auction funds. Reads in part the report seen by the Independent:

Exchange Control continues to conduct on-site compliance inspections on companies throughout the country funded through the auction.

From January 1 to date, one hundred and nine companies have been inspected. The objective of the on-site post auction validations is to account for auction funds utilisation so as to confirm receipt of value in the country.

Exchange Control has continued to levy administrative penalties on importers who fail to fully account for auction funds.

In addition to company on-site visits, Exchange Control is conducting onsite and offsite inspection on banks.

The exercises are meant to check whether banks are administering exchange control transactions consistent to policy. Exchange Control has fined errant banks for various violations (including) failure to pay funded auction allotments within 72 hours of funding by the bank (RBZ).

With eight months into the year, the foreign exchange situation remains favourable, and forecasts point to a good foreign exchange position at the end of the year,” wrote the Exchange Control Division.

Total foreign currency receipts for the period January 1 to August 31 2022 amounted to US$7,698 billion compared to US$5,815 billion received during the same period in 2021 representing a 32,4% (US$1,874 billion) increase. This affirms the significant growth in the level of receipts over the period.

This tremendous growth in total foreign currency receipts was largely driven by a 41% growth in exports (US$1,475 billion) over the period.

This amplifies the continued dominance of exports as a major source of foreign currency receipts, as they contributed about 65% of the country’s total receipts for the period.

Foreign Investment, particularly FDI, though still low, has registered a significant increase of 202% from 2021 of which 62% (US$20 million) of the foreign investment amount was invested in Energy Sector (Zimbabwe Electricity Transmission Company and SinoHydro Hwange Power Holding) from SinoHydro Corporation Holding Zambia.

As of August 31 2022, total international remittances amounted to US$1.833 billion from US$1.505 billion in 2021.

The total amount of diaspora remittances amount to US$1.069 billion up from US$894 million received during the same period in the year 2021.

International remittances on account of international organisations (NGOs) amounted to US$764 million up from US$610 million in 2021.

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13 Comments

Zimdollar 4 months ago

Musade kutivhara apa. Which banks and which companies? Tipeyi mazita, kwete kungoti cinfidential report.


Ndinenyara 4 months ago

Saka at your age you don't know what confidential means?
Zvinobuda here for RBZ to splash names of errant banks all over.

Dr Nostro 4 months ago

This is confidential information, so dont tell anyone or ask questions.

Machiavelli 4 months ago

@Ndinenyara, yes there is banker- client confidentiality, just like there's Doctor-patient confidentiality or even Lawyer-client confidentiality. These are applicable because no third party is involved or has locus standi to inquire into the relationship.

in the latter cases of lawyers , doctors and their patients, no external parties are involved, so that privacy is absolute.

Banker-Client relationship developed under conditions where the bank took in deposits from the client and disbursed loans and other facilities to the client. However Directors and shareholders of the bank have certain rights to know their clients, and that is why certain transactions between the bank and client are referred to the Board or even in certain circumstances to the oversight of the shareholders whose funds are at risk. Therein lies the difference. Shareholders are technically a third party, but because their investment is at risk, there is "the need to know "

If the funds allocated to companies were strictly commercial bank resources, the public would have no need to know. As the Reserve Bank is involved, the RBZ funds are public funds held in trust by the bank on behalf of the nation at large, the public has a right to know. especially if there is abuse.

Just like in courts. If Citizen A has not run foul of the law, his name is kept out of the public eye. But if Citizen B steals money from Citizen X, then his name is published publicly in court because the public has the right to be informed that Citizen B is a risk to society.

Therefore it is morally defensible that errant banks be publicised, because they are abusing public trust, public funds.

Nimrod 4 months ago

if public funds are involved, it should be splashed all over

Sir African 4 months ago

So it is not even newsworthy if it is confidential. It's just a smoke screen otherwise no bank was everpenalized

Bush economics 4 months ago

trying to stop diarrhoea by stitching up the a n u s


Justice 4 months ago

kkkkkkk

Nelson Mahere 4 months ago

Vanhu ve CCC vane depression every time vanenge vachingo popota nekutuka kutaura zvinyadzi.Thats how you identify them.


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WILLIAM SONBOY CHINEMBIRI 4 months ago

I beg to differ from @Naison Mahere and go along with @Machiavelli. [RBZ YANGO WAWATA CHETE. HAPANA ZVINO BATIKA ZVAVATAURA ] If they knew that there was that relationship with their clients, they should have kept quiet from the beginning [ ab initio ].

[ CITIZENS MUST REGISTER TO VOTE AND VOTE CCC POLITICAL PARTY FOR REAL CHANGE].

[[ CHAMISA CHETE CHETE]

Yours faithfully
William Sonboy CHINEMBIRI
[ THE BUSH LAWYER ].


Sendaz 4 months ago

This is a matter of public interest as it helps the general public in deciding which banks to trust with their money


leader 4 months ago

without mentioning names? There's no news.


leader 4 months ago

Pindula please stop this mind capturing nonsense. What kind of journalism are u practicing? What happened to giving readers full information? Mayb the definition of journalism and news has changed



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