Reprint of:

Theresa Sursock, Cash crunch: Economist-in-Chief • Chronicle 31/5/16.
Subject: The nightmare has arrived

22 Unlawful hoarding of cash

(1) Any person, other than a trader, parastatal, moneylender or financial institution, who, otherwise than for

good cause, has on his or her person, or under his or her immediate control, or upon any land or upon or in any premises, cash in excess of two hundred dollars (or such other amount in excess of two hundred dollars as the Minister may prescribe from time to time), shall be guilty of an offence and liable to a fine equivalent to—

(a) the excess cash held in contravention of this section; or

(b) the fine not exceeding level ten;

whichever is the greater amount.

[Subsection amended by section 14 of s.i 109 of 2008]

(2) A person referred to in subsection (1) shall have the burden of proving, to the satisfaction of an inspector, police officer or any court, any good cause for not complying with that provision.

(3) The Minister may, by notice in a statutory instrument, suspend the operation of this section (other than

this subsection) indefinitely or for a period specified in the notice, and may, in like manner, bring it back into operation.

PART IV SUPPRESSION OF MONEY LAUNDERING

[Part IV repealed by Act 8 of 2013]

23 – 32 ….

[Sections 23 – 32 repealed by Act 8 of 2013]

PART V SEIZURE OF CASH UNLAWFULLY HELD

Division A: Cash Detainable Offences

33 Powers of search, entry and seizure

(1) Subject to subsection (2) and this Part, a police officer or inspector may search a person for, and seize,

any cash which the police officer or inspector believes, on reasonable grounds, to be held in connection with a cash detainable offence.

(2) The search or seizure referred to in subsection (1) shall be made—

(a) with the consent of the person concerned; or

(b) under warrant issued in terms of section thirty-four; or

(c) in emergencies in terms of section thirty-five.

(3) Subject to subsection (2), a police officer or inspector may enter upon any land or upon or into premises, and search the land or premises for any cash which the police officer or inspector believes, on reasonable grounds, to be held in connection with a cash detainable offence.

(4) Any person who hinders, obstructs or makes any false representation to a police officer or inspector making a search, entry or seizure for the purposes of this Part shall be guilty of an offence and liable to a fine not exceeding level eight or to imprisonment for a period not exceeding three years, or both.
Theresa Sursock

Cash crunch: Economist-in-Chief • Chronicle 31/5/16.
It is now obvious that the largest single cause of the banknote shortage in Zimbabwe at the moment is because the RBZ has been creating entries for US dollars it does not actually possess.
The way banking is supposed to work is if you deposit money in a bank the bank holds that money on their books either as 1) cash; 2) a deposit in a foreign nostro account; 3) an asset in the form of a loan to someone else; or 4) a deposit at the Reserve Bank.
If it’s #1, if you want to withdraw your cash then that should be no problem. If it’s #2 then there might be a delay while the bank withdraws the money from the nostro account and has it sent to Zimbabwe. #3 can cause liquidity problems but that is never cited as a reason why local banks have no cash, so that can be dismissed. Lastly, #4 is the reason why money people think they have in their accounts cannot be withdrawn. Because this money exists only as an accounting entry in the RBZ’s RTGS system, it doesn’t exist as real money in the form of #1, #2, or #3.
Everyone understands Zimbabwe cannot print US dollars but that fact doesn’t prevent the RBZ from creating money by creating entries in the RTGS system that it manages (or fraudulently mismanages as the case may be.)
How did this happen?
The government of Zimbabwe has been mopping up liquidity by issuing Treasury Bills. Real money that people place in the banks is given by the banks to the government in return for paper called Treasury Bills. These Treasury Bills will have varying maturity dates so that they don’t all become due for payment all at once, something that would potentially bankrupt even the most frugal and competent government.
The Treasury Bills that have matured need to be paid, except of course government doesn’t have the money. That’s no secret. So the government instructs the RBZ to credit the RTGS accounts of the banks that owned the Treasury Bills the money they are owed. The banks gave government real cash for the Treasury Bills but now the government gives the banks ‘virtual cash’ back.
In theory, in order to credit the commercial banks’ RTGS accounts the RBZ would need to debit their own RTGS account at the same time. For this to work properly the RBZ should have been holding physical cash or US Dollars in nostro accounts for the equivalent of what it is crediting the commercial banks, funds that effectively become the property of the banks.
But, of course, we come back to the fact the government is broke. So the RBZ has in fact been crediting the commercial banks RTGS accounts with US Dollars it does not have.
This is not a problem if the banks, or their customers, want to pay the money they think they have in the RTGS system to another account at another bank within the same RTGS system. The ‘virtual cash’ simply gets transferred from one to the other without anyone noticing it’s not there.