Big Companies "Refuse" To Bank Cash - Chinamasa

Big Companies
Published: 2016 June 15 07:50:28 (2345 Views)

FINANCE minister Patrick Chinamasa has revealed that government is investigating 40 large companies to determine how they are handling their cash as the country’s liquidity crisis deepens.

Chinamasa said big companies, particularly those in the retail business, were exacerbating the country’s cash crisis by not banking their daily takings contrary to the legal requirement that they should deposit their earnings on the following business day.

Addressing Zanu PF national consultative assembly members last Friday, Chinamasa said investigations on the 40 big companies would, however, be done in a market-friendly way to make sure that they would not close.

“We have looked at the trend and realised they [retail companies] do not bank their money, yet we have a law that requires them to bank their money the next day given the circumstances,” he said.

“The Reserve Bank has now targeted 40 businesses in a market-friendly way. We don’t want them to close, and we won’t name them, but we are monitoring their cash deposits, cash takings and to what extent they are banking with their respective banks.”

He added: “And we think this will go some way to make the United States dollar circulate. In fact, there was a practice we picked up where some retailers were selling cash. Because people are desperate for cash and, say, those who want $100, will be asked to transfer into the bank of the retailer, say, $150 or $120, and they are given $100 in cash. So those are the issues that we clearly must tighten.”

Zimbabwe has been experiencing a severe cash crisis that has forced government to announce the introduction of bond notes in the coming months, despite resistance from the market. Bank account holders have been struggling to access their hard-earned savings due to the biting cash shortages.

Chinamasa said the use of the US dollar had made the country a prime target by businesspeople looking for the green back, apart from illegal tendencies by big corporates not to bank their cash and subsequently reducing the money in circulation.

He said government had come up with a priority list of goods that could be traded in hard foreign currency, while other domestic transactions would now be conducted in bond notes.

“What the public and the newspapers had lost completely from the measures that we have introduced is the new focus that of management of our foreign currency. Our foreign currency market was overregularised,” the Treasury boss said.

“You could buy any rubbish using our hard-earned foreign currency. As of now, through discussions with commercial banks, players, the Confederation Of Zimbabwe Industries, retailers and so on, we have introduced a priority list which must guide the usage of our foreign currency.”

Chinamasa said government would intensify its fight against corruption and also devise strategies to collect money from the informal market.

He revealed that government would now introduce a cargo tracking system to monitor trucks passing through the country until they cross the borders to make sure undeclared goods are not dumped in the country.

Also speaking at the event, former Finance minister Herbert Murerwa said failure by banks to provide money on demand was the biggest reason why Zimbabweans shunned banking their money.

- News day

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