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*Banks facing insolvency due to increases in TBs and Electronic Money not supported by cash: IMF warns* *Follow Pindula on WhatsApp for daily new updates* https://whatsapp.com/channel/0029Va84dngJP21B2nWeyM3v?gb The International Monetary Fund (IMF) has warned that banks in Zimbabwe are facing insolvency due to the fact that the volume of Treasury Bills (TBs) and electronic money transfers were increasing without being supported by cash reserves. The IMF said: ---------- Latest itel S24 available on Pindula: 128GB storage, 4GB RAM $119 USD WhatsApp: +263715068543 Calls: 0772464000 Buy Online: https://www.pindula.co.zw/market/itel-s24-128gb-22-20240426142756795795/?s=wanews ---------- > [Government was spending] …the borrowed funds by crediting bank accounts of the payment recipients (employees, suppliers, contractors) through the real time gross settlements (RTGS) electronic system. > These transactions increase deposits in the banking system, but without a concomitant increase in the quantity of US dollars available in cash or external (nostro) accounts. To finance the remainder of the deficit, the government issued T-bills, mainly acquired by commercial banks but also used as payment for services. > …On average, the industry could lose up to 15 percent of its capital base (about 1 percent of GDP) for every 10 percent discounting of T-bills, with domestically-owned banks at higher risk. Additional losses could arise from the discounting of RTGS balances. > Changes in accounting rules requiring the valuation of assets to market could bring forward the realisation of these losses More: Financial Gazette _If you found this article useful_ *Please support Pindula by forwarding to friends and groups*
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