"With immediate effect, all money transfer agencies are cancelled," Reserve Bank Governor Gideon Gono said in a statement (read full text).

Institutions whose money transfer licences were cancelled included Standard Chartered, Banfords and Stanbic Bank.

"All local accounts for these entities should be closed forthwith. This withdrawal has been occasioned by non-performance and defiant behaviour by most players in this sector."

Gono said that any bank wanting to appeal against the withdrawal of their transfer licences had only until the end of the month to do so.

Zimbabwe's financial sector was wracked by its worst crisis in 2004 that left seven banks under curatorship and three financial institutions liquidated.

The southern African country is trying to revive its tattered economy, which is plagued by high unemployment levels, poverty and the highest inflation rate in the world.

The problems stem partly from the country's isolation from its former trade partners in the West after Zimbabwe embarked on its controversial land reform programme in early 2000.

Many of the three million Zimbabweans who have left the country as a result of the economic meltdown regularly send back foreign currency to their families from abroad, a vital source of cash for those left behind. - Sapa-AFP