RBZ conducts system test run to ease Interbank FCA transfer hurdles

By Staff writer | 28 Jan 2019 at 16:20hrs
The Reserve Bank of Zimbabwe (RBZ) says it has started testing a system that allows seamless local bank to bank FCA transfers as it strengthens its efforts of setting up an alternative settlement bank. Such a settlement bank will enable local institutions to avoid US based transfer charges.

Recently, RBZ admitted that the absence of a "settlement arrangement" was inhibiting easier movement of payments between local banks.

Last October, the RBZ directed banks to effectively operationalise the ring-fencing policy on Nostro accounts, by separating FCAs into two categories, namely Nostro FCAs and RTGS FCAs. The fixed exchange rate of 1:1 was maintained.

However, the move complicated trade between banks and customers since forex transfers by banks are made using funds held in foreign offshore banks. Implementation of local bank to bank FCA transfers had been a challenge, this is in the sense that Anti-Money laundering issues may become a concern for correspondent banks, if volumes increase significantly.

Until now, the RTGS platform was the only stage available for interbank transfers. The central bank, in a circular said the RTGS platform has been upgraded to include the US Dollar to facilitate local movement between FCAs.

"The function is now available in the test environment for testing by participating institutions," said RBZ deputy director, financial markets – national payment systems Josephat Mutepfa.

"All participants are urged to send test messages end to end and ensure the full cycle of the transaction is completed. Results for the test should be logged immediately on the attached user acceptance testing form and submitted to the RBZ on a daily basis until Friday 1, February 2019."

Mutepfa added that the settlement of USD transactions will commence soon thereafter in the live environment.

Late last year, Stanbic Chief Financial Officer Solomon Nyanhongo said the situation now increases the "risk" with corresponding banks. "For instance, moving FCA funds from Stanbic Bank to ZB Financial Service Bank entails sending information via the United States of America where it goes through the exchange process there. It will then be transferred back into the same country and credited as a nostro receipt."

"So the situation now increases the risk with our corresponding banks. The local market is already considered a high risk market because of some entities which are designated under the United States Treasury's Office of Foreign Assets Control (OFAC)."



WhatsApp Newsletter

Follow us

Latest Headlines