Econet takes RBZ to court over cash in cash out ban
By Staff Writer | 01 Oct 2019 at 17:40hrs
Cassava Smartech has filed an urgent application for a temporary interdict regarding Reserve Bank of Zimbabwe's (RBZ) directive for mobile payment system providers to discontinue cash in and cash out services. The central bank also stopped all cash-back facilities.
The RBZ directive came as part of efforts to stop the buying and selling of cash through mobile money agents at high rates above the approved charges for cash in and cash out with some economic agents not banking cash sales under the guise of cash-back services.
In his founding affidavit, Smartech chief executive Edmore Chibi represented by Mtetwa and Nyambirai, said EcoCash is a pioneering mobile financial service solution that has given access to the unbanked market in an unprecedented scale in Zimbabwe. Due to the serial collapse of banking institution in Zimbabwe, according to media reports, the size of the banked population had reduced to less than 10% of the population when EcoCash was introduced in September 2011.
Since 2011, when the cash in facility was introduced, 227 519 851 cash in transactions worth US$10.19 billion plus ZWL$7.54 billion have been conducted.
"EcoCash has played a critical role in facilitation activity between Zimbabweans in circumstances of acute liquidity challenges. The cash in and cash out facilities are core to the EcoCash system. In order to pull these facilities down, Chibi said the whole EcoCash platform has had to be pulled down first.
"Pulling down EcoCash could thus mean loss of life, loss of opportunities that could save livelihoods and financial loss running into hundreds of millions if not billions," reads the affidavit.
However, applicant has started to implement the shutdown in compliance with the respondent's directive. The implementation of this directive, Chibi said, will cause irreparable harm and will cause the loss of confidence by members of the public in the EcoCash system.
"The financial harm and the loss of confidence cannot be repaired by an award of damages and in any event, the respondent will not have the capacity to compensate for the harm to the applicant and to all its innocent users."