Hey CABS, do we have a local currency? We were under the impression we did not

Posted by Read 13 Comments

A certain CABS customer logged into their account today like they always do, to check on them incomings and whatnot. There was the familiar ‘Good afternoon’ and ‘Welcome back.’ All was well. However, upon closer inspection they realised something strange, something that was not there before.

Instead of going straight into the balances on the customer’s account, CABS had introduced two new subheadings. The first subheading being Local Currency Accounts and the second being Foreign Currency Accounts and what do you know, their account was listed under the Local Currency Accounts.

Now that is strange. If we remember correctly these accounts we have are foreign currency accounts. Last time we checked, the bond note was not currency but rather just legal tender near money, pegged equally against the US dollar (yes, that is how the RBZ put it.) If there is no local currency in Zimbabwe, what do they mean by Local Currency Account? Do they know something we don’t know?

The strange part is that although CABS lists the customer’s account under Local Currency Accounts, the currency is listed as USD. Now, there is a lot we don’t know but the US dollar is not a Zimbabwean local currency. Of that we can be sure. Could this be their way of trying to split bond note accounts and foreign currency accounts (USD included) in the future?

Advertisement

Screenshot: Cabs introduces Local Currency Accounts subheading

It certainly seems so. We might try all we want to maintain that the bond note be pegged equally against the USD but that is futile as the law of demand and supply has already done its work. This discrepancy between the official value of the bond note and the one on the market has led to all sorts of problems. It seems that unofficially banks are keeping two accounts for each of us, one for bond notes and one for real money. Of course no bank is going to confirm this.

They won’t confirm it but let’s consider this, for you to use your Mastercard or Visa to purchase outside Zimbabwe you have to fund it using US dollars. Now wait a minute. If I have just one account with them, which already is a US dollar account (like the CABS one mentioned), how come they need US dollars from me to fund my Mastercard? How do they then know which US dollars were already in my account and which US dollars I put in to fund my Mastercard unless they are keeping two accounts for me?

What do you think about CABS listing two currency accounts? What do you think that is all about? Do they mean ‘main currency,’ as in the one most used in this country, when they say local currency? Let us know what you think in the comments below.

CABSBond NotesRBZ

Central Africa Building Society (CABS) is the largest building society in Zimbabwe. CABS is a subsidiary of Old Mutual Zimbabwe Limited, Zimbabwe's largest life assurance organization. Old Mutual Zimbabwe is in turn a subsidiary of Old Mutual PLC - an international financial services conglomerate. The... Read More About CABS

Bond Notes are a currency of notes backed by a bond that the Zimbabwe government announced on 4 May 2016 by Reserve Bank of Zimbabwe (RBZ) governor John Mangudya. The $2 denomination of the notes was finally introduced on 28 November 2016. More notes were... Read More About Bond Notes

The Reserve Bank of Zimbabwe (RBZ) is the central bank of Zimbabwe. Its offices are located at number 80 Samora Machel Avenue in Harare. The Reserve Bank of Zimbabwe operates under the Reserve Bank of Zimbabwe Act, Chapter 22: 15 of 1964. The Act provides... Read More About RBZ

Previous

EcoCash remodeled website now has increased utilities

Next

TelOne launches WiFi Home and Away, answers to some questions you might have

13 Comments

  1. Tindo says:

    I remember last year Stanbic suddenly replaced our account numbers with new ones and gave us new bank cards. Maybe these new account numbers and cards were for the bond notes. You never know

    1. Anonymous says:

      wrong . . . they did a major system upgrade/change which required that account numbers be chnaged

  2. Nelson Zengeni says:

    You are correct. Local Currency is Bond Note. However, if I deposit money into my USD Account, wont the banks convert it to Local Currency, and when I need it, will I be able to withdraw the USDs?

  3. Mwalimu says:

    Perhaps we need to move into reality and compare the Bond Note and the USD. a) The USD is equal to the Bond note 1:1,
    b) The Bond note cannot be used outside Zimbabwe and a USD can
    Therefore the Bond note is a local equivalent of the USD by decree! If you wish to take a well deserved holiday and visit a relative in Durban. You will purchase an Intercape ticket to Joburg with Bond. Then another Rand ticket from Joburg to Durban. This ticket from Joburg to Durban you will pay for from the proceeds of exchanging BND for USD at the bank at 1:1, if you can get the USD from the bank! Just saying it as pre-school simple as possible!

    1. anon says:

      Im sure we’d all like to know where this mythical bank that gives you USD 1 for 1 with Bond at any amount you want.

  4. Anonymous says:

    Can’t see squat on the image.

  5. man says:

    Money is now being stolen!

  6. The anointed one says:

    If they dare bring any form of local currency then personally i am richer than Bill and the former wrestler combined

  7. read up on it says:

    an fca is a foreign currency account used for making transactions abroad, simple

  8. I. Chitera says:

    it makes legal sense, I have raised this issue before that we need separte bank accounts a forex account and a bond note/local currency account. that way the bank is obligated to give its clients whatever money they deposited and also allow that clients to transact with whatever money they have deposited. now thats a good things as it gives legal ground and trust for depositing USD since you will get bank your USD. This might bring back USD into circulation and solve part of forex challenges we are facing

    1. S. Masuka says:

      that will technically officially mean that the bond will be a standalone currency, which is what no one, gvt and civilians, want to hear

  9. Tanga Tazviona Kare says:

    The issue becomes how to explain the real USD deposits that were converted to Bond note balances, under a purported exchange rate of 1:1. Any officialising separation of accounts now will be an acknowledgement of what really happened, a Governments’ wholesale theft of peoples monies.
    In reality, those prepaid Mastercard/Visa card accounts are the real USD accounts now, whats left is just to allow full account transactions (local USD cash withdrawals, transfers, tt’s etc) on them

Comments are closed.