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Banks under spotlight over parallel market cash flooding

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By Anna Chibamu


RESERVE Bank of Zimbabwe (RBZ) Governor John Mangudya has revealed the Central Bank is now watching all financial institutions like a hawk following the embarrassing flooding of the parallel market with new notes hours after they were released.

EcoBank and CBZ were caught out in the scam with authorities now investigating cases of money laundering against the two financial institutions.

RBZ Governor John Mangudya vowed to go after the responsible cash barons who continue to fuel the black market causing currency instability and inflation.

Speaking on a local Radio Station on Thursday Mangudya said the Central Bank is hunting down all cash barons.

“We are after these cash barons who are fueling the black market syndrome on the market. The RBZ has already instituted investigations to trace which banks were responsible for the loopholes. We will trace the serial numbers on the notes given to each bank this week,” said Mangudya.

The social media was awash on Wednesday with bricks of the new $2 and $5 notes which exposed the banks resulting in a public outcry spilling to Parliament Thursday before the 2020 budget presentation.

Mangudya later released two statement revealing that EcoBank and CBZ had doled out thousands to two separate clients who offloaded it onto the black market.

At Parliament MPs demanded to know what was going on in terms of money supply by the RBZ.

Zanu PF MP Kindness Paradza fumed over the matter alleging he also received coins from his bank.

“We have economic saboteurs in the banking sector. On Tuesday we saw new sealed bank notes in the street and I also got coins when I went to my bank to make a withdrawal yet money was being splashed on the streets by cash barons.

“There is need for zero tolerance to corruption. Those people responsible for issuing money to the cash barons must be hunted, arrested and be publicised. There should be thorough investigations as Finance Minister Mthuli Ncube must issue a ministerial statement regards this matter on what transpired,” said Paradza.

Confederation of Zimbabwe Retailers president Denford Mutashu said it was unfortunate that the issue of the parallel market has not received significant noise.

“The other issue is that the economy is heavily informalised, even the injection of the new notes; you saw how much was found on the informal market for the day but the money was injected into the financial institutions such as banks.

“We need to tackle the issue of the existence of the parallel market, parallel market exchange rate and the issue of the informalised economy itself,” highlighted Mutashu.