The future of the local currency and its transactional gateway, Real Time Gross Settlement ( RTGS) remain uncertain following the Reserve Bank of Zimbabwe’s recent move to limit ZIPIT daily and monthly transactions to ZWL$20000 and ZWL$100 000 respectively.
The Reserve Bank of Zimbabwe through its investigative arm, Financial Intelligence Unit (FIU), recently directed ZIPIT service provider ZIMSWITCH to immediately limit daily and monthly transactions.
“FIU has noted that shortcomings in the zipit system that made it difficult for the bank regulators and law enforcement agencies to speedily identify counter parties to a transaction or to identify multi- banked users.”
“Until such time when adequate safeguards are built into the ZIPIT system to minimize the money laundering risk zimswitch is directed to implement with immediate effect daily and monthly limits of zwl$ 20000 and zwl$ 100 000 respectively,” read part of the directive.
The Real Time Gross Settlement System (RTGS) has been the only system that has not been affected by the changes.
And the question yet to be answered is when the RTGS likely to face the same fate.
Accounts holders are currently stampeding to empty their accounts as they fear more stricter measures could be announced soon.
While this panic mode continues to grip the nation, the parallel market rates have continued to shoot with the Old Mutual Implied Rate recording a sharp increase of 14 units now demanding 136.5275 but the parallel market rate is still lingering around 75.
This move has seen the net closing in on the most popular platforms that have been used to make instant transactions mainly Ecocash Mobile Money , which has been limited to a maximum daily of $25 000 while the ceiling per month is now $150 000 for any transaction associated to a bank account.
The same measures have been introduced to the Zipit system, an instant bank transfer system that moves transactions across all national banks.
The move has seen daily Zipit transactions being limited to $3 000 while the monthly limits have been reduced to an all time low of $100 000.
This means at the current avarage pararrel market rate, the maxmum amount one can make is only $1 400 USD per month and less than $50 USd per day.
Under such circumstances, the only viable option for anyone willing to make huge transactions to pay for any asset, bill or even commodity will have to only use the TGS system which is but only slow, and usually reflects within 24-48hrs.
This same system has always seen a lot of challenges, with bank processed transactions having too much human interference, they are going to be overwhelmed and prone to much more mistakes, delaying the already tired system
this move will overwhelm the RTGS as the only platform moving larger volumes, save for those who have an option for online payments .
The fear however rests on what will happen next to the RTGS, as all volumes are going to go that way.
Both legal and illegal transactions are going to crowd the RTGS systems.
People buying forex, settling bills, buying cars, stands, houses and other properties will only be able to do so via the RTGS.
The government once again will have to move in to this sector, people are not gloing to stop transacting for whatever reason, the biggest problem with forex shortages is that the government has not availed any legal way in which one can buy forex.
All the models are collecting and mopping up the foreign currency reserves, does it mean the government will soon be clamping down on this inter-bank system as well.
What does the future hold for the RTGS and more importantly what does this mean to anyone who wants to expect or make his next transaction using both the dangerous currency and system both termed the RTGS.
If the future remains uncertain due to policy change around the RTGS, why should anyone anticipate this currency for the next transaction if its future remains uncertain without speaking about the volatility of it thereof.
This could be a silent death of the RTGS , slowly but surely , its advantages as a system and currency are all but crumbling, posing a risk.