Cash crisis eases

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THE cash crisis which rocked Bulawayo on Monday eased yesterday as affected banks moved with speed to suspend limited withdrawals.

Gamma Mudarikiri
Own Correspondent

Southern Eye Business on Tuesday revealed that a cash crisis was looming after Afrasia-Kingdom and the People’s Own Savings Bank (POSB) ran short of cash, forcing the financial institutions to limit cash withdrawals.

But when Southern Eye Business  visited banks yesterday, it was business as usual although there were long queues especially at POSB after a disrupted service on Monday.

Afrasia-Kingdom Bank, however, still had its automated teller machines (ATMs) at its Bambanani Branch in Bulawayo disabled.
The bank on Monday attributed the move to the unavailability of suitable denomination notes.

According to the bank, the old notes currently available in circulation increase the frequency of ATM breakdowns resulting in service disruption.
The bank also blamed the cash shortage on what it said was high demand during the polling day, July 31.

Yesterday officials in the banking sector hinted that the run for withdrawals was because of the jittery atmosphere over a pending Zanu PF government which controversially won yet another election in which President Robert Mugabe garnered more than 61% of the votes.

Zanu PF, with  more than two-thirds majority in Parliament, has vowed to indigenise foreign-owned financial institutions.

In a statement to the Press yesterday, Zanu PF said the people of Zimbabwe had given Mugabe and the party a clear mandate to transform the economy through the indigenisation and economic empowerment policies.

“Zanu PF is ready to start implementing the policies expressed in the party’s manifesto. These policies are premised on the indigenisation of the economy and the monetisation of indigenised and idle assets,” part of the statement read, adding that over the next five years, Zimbabwe is going to witness a unique wealth transfer model that would see ordinary people take charge of the economy.

As part of its economic policy, Zanu PF intends to intensify the process of indigenising foreign-owned banks.

The seven foreign-owned banks in Zimbabwe hold deposits of $1,3 billion against 19 locally-owned banks that hold a combined total of about $3 billion.  There are fears the indigenisation of the financial institutions would destabilise the sector.

Barclays, Standard Chartered and the local units of South Africa’s Standard Bank and Nedbank, have all submitted proposals to comply with the law.

Due to jitters in the sector over the outcome of the polls, some banks have stopped issuing personal loans in the wake of Mugabe’s disputed victory — deemed fundamentally flawed by the West and its allies.
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