Cash dealers are using the real time gross settlement (RTGS) system to deposit the South African rand into bank accounts of the cash seeker...
Cash dealers are using the real time gross settlement (RTGS) system to deposit the South African rand into bank accounts of the cash seekers in South Africa despite tighter measures put in place by monetary authorities to plug cash leakages.
This comes as businesses, largely in retail and wholesale, have resorted to using illicit means to purchase their wares from South Africa to avoid delays in foreign payments after the Reserve Bank of Zimbabwe (RBZ) put a priority which has to be followed to process foreign payments.
A source involved in the cash selling business since 2007 told NewsDay that the cash dealers have noticed slight drops with the United States dollar being traded.
As such, the source added cash dealers were opting to have their contacts in South Africa RTGS or deposit the cash physically into the recipient’s South African bank account. This was done to allow the cash dealer to hold onto the dollars they would have received.
“What happens is that suppose you have your $10 000 which you want in South African rand, you bring me the cash and when I have received it I call my contacts in South Africa, usually other Zimbabweans living there and instruct them to deposit the money (equivalent in rand) into an account which you would have given me,” the source said.
“We have seen small declines in the amount of United States dollars, but have still seen businesspeople bringing money equivalent to R1,2 million (about $82 956).”
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A survey conducted by NewsDay among cash dealers at the Fourth Street bus terminus found that there has been a slight spike in those seeking the South African rand that get their supplies from South Africa.
Those seeking larger sums of cash split the money into small parts so as to not raise suspicions and bring it to cash changers through proxies for a certain percentage.
Banks being used in South Africa where the money is deposited include First National Bank, Nedbank (owner of MBCA Bank) and Absa Bank Limited a wholly-owned subsidiary of the Barclays Africa Group, among others.
Financial expert Persistence Gwanyanya said using banks in South Africa to RTGS or deposit cash to buy goods was in response to delays in foreign payments on the back of depressed nostro accounts.
“People then prefer to have their payments done in a foreign land like South Africa and someone just has to facilitate at a fee of about 10%. At the moment, foreign payments are very difficult. The banks’ nostro accounts are currently not funded so people have to resort to these illicit means. This is probably being done by the well-connected people on the market and rich people,” Gwanyanya said.
“To get large sums of money, it is done through special applications made to the bank depending on the nature of business
and availability of cash…the real people perpetuating this practice are those in retail who for example get $10 000 or $20 000 on a daily basis.”
However, he said the foreign exchange priority list made such applications for cash difficult.
Source: Newsday
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