Banks accused of swindling civil servants of their Nostro payments

Below is the statement from the Ministry of Finance with regards to the challenges being faced by civil servants to access their Nostro payments.


Pursuant to Government’s commitment to continuously review and improve the remuneration framework for Civil Servants, taking into account the transitory economic challenges being currently experienced in the country, which have been exacerbated by the Covid-19 pandemic, Government, on 17 June 2020, made a commitment to pay to serving Civil Servants, a flat non-taxable, Covid-19 Allowance of USD75.00 per month. Government Pensioners are also being paid a flat, non-taxable, Covid-19 Allowance of USD30.00 per month.

These funds are being paid directly, in Foreign Currency, to the Nostro accounts that were opened by all regulated banking institutions for the purposes of receiving these funds.Treasury is pleased to announce that it is today making a further release of the necessary Foreign Currency to enable the payment of the US$75.00 Covid-19 Allowances to Civil Servants as well as the monthly commitments to Pensioners of US$30.00.

However, Treasury notes with concern and disappointment that some regulated banking institutions, in connivance with some major retailers, have conspired to limit or prevent beneficiaries of this scheme, from accessing the full foreign currency value of their payments.We have also received reports that some banks, are telling customers that they have not received Nostro USDollars from Treasury, a situation which has resulted in reputational damage to the Government and unnecessary ill feeling amongst Civil Servants and the public at large.The Ministry of Finance and Economic Development, would therefore like to advise the general public, and in particular the beneficiaries of the USDollar based monthly Covid-19 allowances, who are Civil Servants, and Government pensioners, that Government is making payments to their accounts in actual Foreign Currency.We have however become aware that some Banks have been unwilling or unable to speedily provide adequate facilities and transactional platforms to enable beneficiaries to access the full foreign currency value of these allowances.

This behaviour runs counter to the spirit and intentions of the President of the Republic of Zimbabwe’s, His Excellency, E.D Mnangagwa, when he made the offer to Civil Servants and Pensioners to pay these allowances in foreign currency, which are meant to provide an inflation hedge.We note and highlight below, some of the bad practices that have been reported to us, that both disbursing Banks and Retailers should immediately desist from and or address:

-Some Banks have not communicated adequately, as agreed with the Reserve Bank of Zimbabwe, on the opening of new FCA accounts for Civil Servants and Pensioners. A significant number of beneficiaries remain unaware of the existence of these new bank accounts and their terms of operation.

Some Banks have not made any serious and visible efforts to issue suitable cards and to deploy relevant and adequate supporting point of transaction equipment to enable beneficiaries to use the cards to make payments for goods and services using the foreign Currency denominated cards.

Additionally, electronic platforms for transacting in the USD allowances are either absent or inadequate, or information about these is not available.As a result, some Banks are in effect forcing beneficiaries to liquidate their Foreign Currency allowances, and imposing several restrictions on the operations of the FCA Nostro FCAs that have the direct and undesirable effect of disenfranchising the beneficiaries.Government has taken due exception to these behaviours, and especially in regard of the fact that in addressing the wage challenges faced across the Civil Service, Government needs the assistance and co-operation of players in the banking system, who have a duty and obligation to ensure that their actions or omissions do not impose negative shocks in the market.

It is therefore desirous that working closely with The Reserve Bank of Zimbabwe, Banks are strongly encouraged to urgently address the above concerns and immediately upgrade their domestic payments infrastructure as well as providing adequate internet and other banking platforms in light of the increased need for “transactability” of the foreign currency allowances.

Additionally, Banks are encouraged to immediately make widely available to the public, and more directly to their individual customers, information relating to the operation of the Nostro Accounts that have been operationalised for receiving the Covid-19 Allowances. It is critical that the unhealthy information gaps and access issues that presently obtain are urgently addressed.

Government wishes to reiterate its commitment to payment of living wages to its employees, and advises members of the Civil Service, that the Covid-19 Allowances have been put in place as an additional cushion, whilst negotiations for a comprehensive wage structure, which includes significant non-monetary benefits, are continuing.

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