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Banks to scrap withdrawal limits |
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Monday, 20 February 2012 17:15 |
 Cash withdrawal limits are expected to be removed with effect from next month but experts are raising concern whether the initiative will be sustainable considering the limited financial inflows.
According to the Reserve Bank of Zimbabwe (RBZ)’s latest circular to banks, the lifting of cash withdrawal limits currently pegged at US$10 000 with effect from 1 March this year is being done to encourage savings as well as the use of the formal banking system.
While the removal of cash withdrawal limits is expected to create debate among stakeholders and economists given the funding constraints within the economy, an economist, Mr David Mupamhadzi says the move is likely to increase long term deposits.
“We hope there shall be long lasting solutions to cash challenges for the benefit of the banks,” said Mr Mupamhanza.
However, the Zimbabwe National Chamber of Commerce Chairman, Mr Davison Norupiri says the lifting of cash withdrawal limits might create challenges to the financial sector which is struggling to take in US$3 billion circulating outside the formal banking system.
“I do not believe that this will be the real idea, anywhere, let’s wait and see how the move will affect the economy,” he said.
Earlier this month the RBZ set US$10 000 as the cash withdrawal limit with amounts exceeding the threshold requiring a 24 hour notice to the processing bank.
The worsening liquidity situation in the economy, delayed cash payments and alleged illegal cash externalisation practices had prompted monetary authorities to tighten the maximum cash withdrawal limits.
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