Banks To Stop Cash Withdrawals? Why This Is A Race To The Bottom…

William Chui Avatar
us$ 50, bank note

Just picked myself up from the floor when I read this article on a Zimbabwean daily print newspaper that states that Zimbabwean banks have resolved not to issue cash to non-exporting customers.

So the Head of the Bankers Association of Zimbabwe came out and said this at a recent event (emphasis mine):

For people who are not exporters, the likelihood of getting cash from banks are slim, under the current situation. That is why we are encouraging the use of plastic money. When we receive cash, we have to think if we should give it to individuals or companies that will generate more cash and foreign currency. This is a difficult decision we have to take, we have to face the truth, cash is a scarce commodity and therefore it should be rationed. That is why we are encouraging the use of electronic platforms.” 

I know right.

Whatever they’re smoking, I think there should be laws against that.

I know this is some heart-wrenching news for those who have been buying diamond rings, Rolls Royce cars and mansions in South Africa as well. Sorry, now (you might) start to feel what it feels like being Zimbabwean.

I won’t go down the “but what happened to all our US dollars that we deposited” road, instead, I’d rather put it out clearly why this move by the banks could make us “fast-forward to 2008” quicker than we’d hoped.

Making A Cashless Society

In essence, this is a noble idea.

Everybody using their mobile money or bank card to swipe as payment has its advantages. There’s better security when your money is digitally stored, if anyone robs you (ok, forget what the banks have done) you’ll still have access to your funds in your account.

There’s also the benefit of a paper trail. Knowing where your money has gone out to makes it easier for you to watch your budget and subsequently curb any outward behaviour.

However, this is where the train comes off the rails: so long as there is no cash circulating, everybody will be swiping and ‘ecocashing‘ thus trading in ‘RTGS/transfer’ money. So, we’ll all go to TN Pick and Play (a  hypothetical grocery store) and swipe, no-one will pay in cash (as the banks are not issuing any to ‘non-exporters’).

As almost every local business imports something from out of the country, the appetite for hard currency is huge. The little hard currency that will be left circulating will quickly be swallowed by those who import (Zimbabwe is largely a consumer market and imports over $3.6 billion dollars worth of products/services annually) and very little will reach the banking system.

So what we’ll now have is just the money (real US dollars) that is being generated from the goods we export.

The idea is that this money will go back into businesses that are exporting, recapitalise them and enable them to produce goods/services that can be exported.

Until we bring an untrustworthy Government into the equation, that itself has a serious hunger for forex, more so in an election period. Speaking to Reuters, economist John Robinson stated: This government has a track record of spending beyond its means and in an election year we will see a much, much bigger deficit.” Should their spending increase then it’s likely that they too will be eating into the limited forex available.

And what does TN Pick and Play do?

They’ll approach their bank and request for forex to pay their suppliers in South Africa (did I mention that we import a lot as a nation?). The bank will tell them that they’re no exporters and so won’t be able to issue them with funds.

TN Pick and Play then will take it up with the Reserve Bank of Zimbabwe, stating that they fall within the ‘priority list‘ and believe that they should be given funds. Sadly, with empty vaults themselves, RBZ will turn them join the que and ‘once something comes in’ they’ll release funds.

Sadly nothing will come in.

As TN Pick and Play are closely watched, they won’t be able to source forex on the black market to purchase goods. If they do decide to opt for this route the cost of the forex will be so high that their prices will become ‘uneconomical’ and resultantly Government will step in and be all pro-people and call for prices to be reduced.

TN Pick and Play will then stop restocking and things will disappear from the shelves (stocks won’t be getting replaced). Did we watch this movie before?

As can be seen, from a ‘simple’ we won’t be issuing cash to individuals and non-exporters, the banks are seemingly playing a part in taking us down the 2008 road again.

They’ve said it themselves.


  1. sdfhkgbsdjk

    well this is stupid. cz at the end of the day if consumers dont get cash tey cant buy from the producers who manufacture goods and services as well as the exporters. at the same time if manufacturers get no forex they cant produce to sell to the consumers. so bankers association should just keep trying to create a bit of balance. cz if a consumer has no cash they end up buying from the black market. the honest truth is an explanation is needed on what happened to the us dollars in the banking system as far as I know all bank balances to be created were from real us dollar inflows so rbz bankers association…. how far???

  2. FN


  3. phillip musandiriri

    What this guys are doing is simple telling the majority of the Zimbabweans not to bank their monies if they are unable to go and withdraw it.What a shame.Its a very big shame to know that people wont be able to get their hard cash,Do they mean we will use cash in paying for the combis.

  4. Anonymous

    A race to the bottom? Did we not already hit the bottom back in 2008, right now we are on a return trip , besides its not like we went that far “up” anyway. Thanks to all my fellow ignorant (read : stupid) Zimbos, let the good times roll.

  5. Anonymous

    how can you promote the use of plastic money by first scaring people with that nonsense. we have simply lost faith in our financial system. this will cause huge problems even for the few exporters.

  6. Anonymous

    How can you promote the use of plastic money when the real notes are not there.
    We will end up having too many zeroes without the back up of the so called AfrexZim.

  7. ZIMRA loves no cash!

    dont forget the paper trail for ZIMRA, they are probably loving this cashless situation and maybe ZIMRA had a hand in creating this situation in the first place!!!

  8. Shinobi

    This is a complete disaster but the banks are not to blame, a corrupt and incompetant government as well as a apathetic society are.

  9. Mmmillionaire

    Thanks for the insight… I got ideas and i should plan to use this information to my advantage… Always lucrative… Make millions… Millionaire mindset

  10. Gomez_Jr

    @Techzim, were did you get this information from?? Please tell us.

  11. Anonymous

    A cashless society is possible only when the economy is doing well. What we should be asking ourselves is, what has got us where we are today?

    1. Edmund

      With respect, I think the whole idea of pursuing the ‘cashless society’ vision needs some brakes. These are just statements of a cashless central bank to try to con us. It’s like advocating for natural remedies simply because you can’t afford medicines. Thing is, even in the developed countries, cash still rules, but the infrastructure for cashless systems is there. Here in Dubai, you can withdraw as much as USD 3,000 from an ATM every day, even though you can pay bus & taxi fares electronically. Thing is, at some level we all need cash, and we should be able to get cash when we need it, within reason. Let the RBZ work on incentivizing electronic transactions by making it cheaper or even FREE to do so, not by forcing us through limiting cash withdrawals.

  12. Anonymous

    I would just say system must be overhauled, partial solutions won’t help, these are symptoms if a disease

  13. Anonymous

    The Lie we all need to be concerned about is how Netone is reporting to have 5,480,073 connected subscriber and 4,845,458 active subscribers it does not make sense that they is a variance is 12% in such a multisim environment. Econet Variance btw connected and active is 65% and Telecel is 100%. Potraz need to audit those NetOne numbers unless they are also part n pass of the conspiracy. With NetOne number at active 4.8mil subs and an ARPU of $3 they should be making almost $186m annually and apa they don’t pay any tax nor the licence fee. What we can see from the POTRAZ report is that NetOne is a House of Cards soon to crumble.

  14. Anon

    Promotion of plastic money is not for anyone’s benefit at all, it is to keep governments quack financial system going. Government is printing virtual dollars that only exist in the banking electronic system (rtgs). Problems arise when account holders try to withdraw this “money”, hence the withdrawal limits.
    If it were not for the plastic money and withdrawal limits , banking system would collapse.
    Promotion of plastic money being used to cover up mess that government has created.
    It is amazing how most (judging by this article) do not get what is really going on. History is repeating itself , government is printing money , that happened before.
    Government is stealing from its citizens, the real money that was initially in the system has been stolen the same way it was stolen during the Gono era when all foreign currency accounts were held a the Reserve Bank. This time they replaced your real money with their surrogate currency.
    How did it all end by the way? Why do you think that junk stocks on the ZSE are appreciating, the writing is on the wall.

  15. Zimboman

    We are not in a vacuum where things are held constant, mr RBZ plastic brains must think straight like a governor & use a holistic approach not this Auto craze style of governing a public office. T&C now invalid, Swiping not efficient at all lv tested the pill of failing to get a service & get tongue lashed by other customers/buyers behind me in the Que. Zimboz back to poverty again. Mr Plastic money sure? Diminished diminishing cash reserves vs unsupported RTGS money, Zimboz desperate to survive will hold on to the little they have. Farm employees vs plastic money, maid vs plastic money, vendors vs plastic money. Who is fooling who or who is following who in this plastic vacuum circle of Plasticanisation by by Dr Plastic.

  16. Tofara

    The transport sector is not swiping (buses, taxis) and this creates demand for cash. Let’s solve that one.