The Reserve Bank of Zimbabwe (RBZ) ‘s Financial Intelligence Unit imposed lower limits for money transfers through the Zipit platform as it continues its fight against illegal foreign currency traders.
Zipit (ZimSwitch Technologies Limited’s Instant Payment Interchange Technology) is a platform that enables instant inter-bank funds transfers between ZimSwitch’s member institutions (Banks and Wallets) connected to the ZimSwitch’s network.
Zimbabwe’s apex bank recently won a court case against mobile services provider Econet Wireless’ EcoCash platform, which had sought relief after the regulator had frozen the company’s mobile agent lines.
RBZ was saying the agent lines were being abused by illegal foreign currency dealers.
On Tuesday, the High Court of Zimbabwe ruled that court ruled that EcoCash had no standing to litigate on behalf of its agents and RBZ actions lawful adding that it cannot interdict a lawful act as that interdict will prevent the RBZ from performing its functions in terms of the law.
In the latest development around the FIU’s battle against illegal foreign currency dealers, the regulator has imposed limitations on the amounts that can be transferred on the Zipit platform.
In a letter dated May 27, 2020 and addressed to ZimSwitch Technologies CEO Cyril Nyatsanza, the FIU said the measure was temporary.
“The FIU has noted that the existing Zipit transaction limits which have no monthly cap are being misused, primarily for illicit foreign currency transactions.
“The current Zipit limits of $100 000 per day allow a customer (subject to any bank-specific limits) to move about $3 million per month, using a single account, and much more if he/she is multi-banked and/or uses third party accounts.
“The FIU has noted KYC shortcomings in the Zipit system that make it difficult for banks, regulators and law enforcement agencies to speedily identify counter-parties to a transaction, or to identify multi-banked users,” reads the letter.
Until such time when adequate safeguards are built into the Zipit system to minimize the ZimSwitch is directed to implement, with
money laundering risk, immediate effect, daily and monthly Zipit limits of $20 000 and $100 000, respectively.
“The limits have been arived at cognizant of the reality that very few Zimbabweans earn more than $100 000 per day, and those who do have other payment options available for higher value transactions.”
Illegal foreign currency dealings have resulted in significant depreciation of the Zimbabwe dollar, with the black market rate rising to over 60 to the United States dollar, while the interbank rate remains pegged at 25 to the US dollar.