EcoCash wants the High Court to stop the Reserve Bank of
Zimbabwe (RBZ) from suspending mobile money agents from conducting financial
transactions and restore full functionality to those affected.
EcoCash is the leading mobile payment platform, and while
direct payments and bill payments have not been affected, the suspension of a
large number of agents has hit transactions involving cash-in and out.
The lawsuit follows the central bank’s move on Monday to
freeze transactions of an unspecified number of mobile money agent lines from
EcoCash and suspected to have been behind fuelling recent exchange rate
volatility by using their agent status to buy and sell foreign currency.
The RBZ directive issued on Monday suspended and froze
EcoCash accounts and NetOne One Money accounts of agents with a monthly
transactional threshold of $100 000 after transactions totalling $75 million
were recorded.
The suspension of the mobile money agent lines and accounts
across all networks was to facilitate investigations into potential illegal
foreign currency activities.
In an urgent chamber application filed at the High Court on
Wednesday, EcoCash, represented by Mtetwa and Nyambirai law firm, wants an
interdict prohibiting the enforcement of the RBZ’s directive issued on Monday.
The chief executive officer of EcoCash’s parent, Cassava
Smartech, Mr Eddie Chibi, argued in his affadavit that EcoCash has 11 million
subscribers and benefits people from all parts of the country.
The RBZ action had the effect of limiting Ecocash customers
from accessing its services through its agents as most of them have been
suspended.
“Because of the legality of the suspension is challenged, a
delay in dealing with the matter will result in prejudice not only to the
applicant but also ordinary members of the public,” said Mr Chibi.
EcoCash platform is the most widely used payment platform
in the country and serves the unbanked in accessing financial services, which
include the purchase of basic amenities such as electricity, said Mr Chibi.
It was also Mr Chibi’s contention that the directive issued
at a time of lockdown, will result in members of the public having to travel to
transact services that they can easily access through the EcoCash platform.
Mr Chibi further argued that EcoCash agents were not heard
before the directive was issued in breach of provisions of the Administrative
Justice Act.
The Act requires that an administrative authority acts
lawfully, reasonably and in a fair manner, which does not violate the rights of
those affected by the decision.
The majority of financial transactions in Zimbabwe are
conducted on mobile platforms with EcoCash accounting for about 95 percent of
the mobile volumes with the remainder handled by NetOne’s OneMoney.
Preliminary investigations by the RBZ’s financial
intelligence Unit (FIU) allegedly show that transactions valued at more than
$75 million were being executed on the agent lines even though the nature of
their businesses did not support such huge money movement.
What prompted the suspicion was the fact that the value of
transactions remained excessively high despite the country being under the
Covid-19 lockdown for the past five weeks.
The central bank wants to ensure that people or businesses
with the agent lines are bona fide entities and they have to prove the source
of their funds.
The FIU, which tracks financial transactions in this
country, wants mobile operators to enhance their Know Your Customer framework
after establishing that there is weak enforcement of this rule given the amount
of suspicious transactions.
It is also understood that the intention of the blitz was
to stop illegal foreign exchange transactions that could be artificially
pushing the exchange rate volatility, thereby fuelling inflation.
Recently, the RBZ suspended some bureaux de change and
micro finance institutions over suspected illegal forex activities causing
exponential depreciation of the domestic currency.
This is widely believed to be the driving force behind a
sustained rise in prices, which has seen inflation galloping to new record
levels. Herald
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