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RBZ Cleared 4 Banks For Following Rules Properly Meaning Its Possible For All banks To Profit Through Their Normal Business

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Reserve Bank Of Zimbabwe (RBZ) Governor Dr John Panonetsa Mangudya cleared four banks after investigating them with their 12 counterparts which were found guilty of not adhering to Banking laws.Mangudya after having a very good look into the depths of each bank, something the Governor does these days with modern software from his Financial Intelligence Unit (FIU) desks, cleared only four out of sixteen banks and found that these four had been following the rules properly. This means it is quite possible for all banks to make profits through their normal business.

This comes on the back drop of efforts for personal gain and for even nastier ends which need to be blocked. The latest effort being to block private liquidity and money creation which appears to be working to a degree, but also seems that this is a continual effort, requiring pressure on the whole system. This after a dirty dozen of banks were snared in the last effort and have promised to reform.


All banks, both those traded on a stock exchange and those with shares far more closely held, are still obliged to publish fairly complete results frequently to meet Reserve Bank regulations. Perhaps the reports covering the second quarter of this year could provide some interesting reading along with a few lessons on just what can be buried in a set of accounts if someone’s job is on the line.

Banks have put in place the internal measures they need to know their customers and while a customer can probably do the odd modest bit of skating on thin ice, they certainly cannot do anything very dramatic or systematic without arousing some deep dark suspicions in the mind of their bank manager.

The Second Republic admits that the previous Government, created the bulk of its money out of nothing and the resulting inflation came from the Government. In 2018 there was a major change and Zimbabwe went from loose fiscal discipline to one of the tightest fiscal setups around, with balanced budgets, hard tax collection, and Government ministries and departments were forced to follow the budget and to account for everything.

Shortly afterwards this was followed by a positive balance of payments, that is our foreign currency inflows exceeded our outflows, and so there was enough foreign currency. That should, after some adjusting and sorting out what was hidden, have resulted in very low inflation, stable exchange rates and the like.

It has, at times, but we then have sudden surges and spurts. The Reserve Bank checked out its own auctions and found some cheating, and that some of the cheats had either very slack bankers or conniving bankers. So it tightened rules. Sometime of course a cheat could bank with two or more honest competent banks and just not pass on the information.

But the latest spurts appear to be very largely funded by free-for-all lending, that is people and businesses borrowing money they certainly do not need for normal business requirements. And that money goes into speculation.

This is way beyond what can be considered understandable cheating, that is trying to preserve value by dipping into the black market with your own money and locking away the foreign cash. That dealer is not too fussed if the rate stabilises since their motive is preservation. There is damage, but not a lot.

But we also get those who need a falling black market exchange rate to make money, since the original money is borrowed and then must be churned between currencies or in more complex deals that involved goods and services as well, so the money can be paid back with interest. And here we get what can be thought of as vampires, those who need to feed on blood. And their bankers know what they are doing.

Since the black market is small compared to our total foreign currency flows, it does not need huge fortunes to mess everything up enough to produce the blood.

ross moyo

#MondayBlues:Zimbabwean Dirty Dozen Banks Fingered Out of 16 Undermining RBZ MPS Gains

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