RBZ Warns Banks Conniving With Exporters

THE Reserve Bank of Zimbabwe said it will take action against banks which are conniving with exporters to allocate their foreign exchange receipts to specific importers. 

This illegal practice entails under declaration of proceeds and matching nostro balances with selected exporters' receipts. By matching nostro balances with selected exporters' receipts, banks will have other receipts not reflected in the declared account.

This means the funds will be kept offshore rather than repatriated to Zimbabwe since the declared balances would only show proceeds from selected exporters.

It is understood that exporters who would have been paid are now conniving with the banks to process the payments of their preferred importers while charging interests.

RBZ Warns Banks Conniving With Exporters

Under normal circumstances, banks are required to match their nostro accounts with all exporters' receipts, which would then be allocated in accordance with the foreign exchange priority list that guide financial institutions in the distribution of foreign currency.

In instances where the exporter also wants to import, even if is not in the high priority category, the banks can process the payments using resources from the exporter's export proceeds.

The illegal practice of matching balances with selected exporters has resulted in the accumulation of pipeline payments, despite some banks sitting on huge nostro balances.

The sources said the accumulation of such payments have resulted in delays by banks in processing payments for imports such as crude oil required by cooking oil processors.

Miners have also warned that Zimbabwe could lose the equivalent of four months of mining output this year due delays by banks in processing payments for imports of spares and consumables.
"The idea behind is to suppress balances and this will appear as if the bank does not have a huge balance on their nostro account," said one source who declined not to be named.

The central bank has since warned that it would take action agonist such malpractice.

"The exchange control has noted with concerns the practice by some authorised dealers, who are matching nostro balances with specific exporters' receipts," said Mr Morris Mpofu, RBZ director, exchange control.

"This practice is resulting in the accumulation of pipeline payments while the authorized dealers have large balances sitting on the nostro accounts. In order to address this malpractice authorized dealers are required, with immediate effect to desist from matching nostro balances with specific exporters. In this regard, authorized dealers are advised that exchange control shall monitor and take corrective action agonists such malpractice in line with Exchange Control Compliance Rating System."

Chambers of Mines president Mr Toindepi Muganyi told a parliamentary committee that banks were taking up to 20 days to clear payments for imports by mining companies.

"This will remain a huge potential risk to the outlook," Mr Muganyi said.