Bankers Association of Zimbabwe (BAZ) has acknowledged that banks had a significant role to play in making the externalization of funds possible. Some weeks ago, President Mnangagwa released an infamous list that implicated many organizations and individuals in externalizing $827 million worth of funds.
Charity Jinya, BAZ president admitted that some financial institutions had not practiced due diligence in making sure that CD1 forms are submitted for customers and this, in turn, left many international trade transactions unreconciled. CD1 forms are documents used by companies that engage in international trade and submitted to the Reserve Bank of Zimbabwe (RBZ) for settlement.
BAZ said that banks were not doing enough in assisting customers to submit the CD1 forms so that transactions could be reconciled with their international trades.
We do admit there are administrative issues involving the banks as raised by some companies
After the publication of the list, many companies have stated that they were not aware of any unreconciled transactions. This may be true but the companies engaged in international trade should have just exercised due diligence by cross-checking that all of their transactions were reconciled instead of being overly confident and assuming that all is well.
How can companies and individuals clear their names?
Bank clients can approach their respective financial institution and appeal for their representation to RBZ in order for their name to be cleared from the list of externalizers. The companies will have to provide thorough evidence and convincing explanations for their bank to represent them.
When an appeal is made, with circumstances explained our regulator, of course, will have to look at the explanation that we give for that transaction to be cleared
Despite this allowance, BAZ reported that it hasn’t yet recorded any appeals from the persons implicated in this scandal. And it’s self-evident because no company has publicly reported having been cleared from the externalizer’s list.
What is surprising the most is that banks can make administrative errors in processing a client’s international trade settlement and yet not be aware of the error after an audit takes place. This can only leave an impression of wonder as to whether banks are knowingly aiding and abetting externalizers or they are just clumsy.