ZiG Launch: RBZ Scraps Bank Service Charges
The Reserve Bank of Zimbabwe (RBZ) has announced a new directive prohibiting banks from imposing maintenance or service charges on individual bank accounts holding less than US$100 or its equivalent in the newly introduced ZiG currency.
This announcement, made by RBZ Governor Dr. John Mushavanhu during the long-awaited 2024 Monetary Policy Statement, marks a significant shift in the country’s banking policies.
The announcement was part of a broader unveiling of Zimbabwe’s innovative gold-backed currency, the ZiG.
“With immediate effect, banks will not charge monthly bank maintenance or service charges for individual bank accounts with a conservative balance, daily balance of $100 and below, or its equivalent in ZWL for a period of up to 30 days.
“At least if you leave your $100 in your account at the end of the season, you should be able to find it in your account at the beginning of the next season,” declared Governor Mushavanhu.
ZiG Launch: RBZ Scraps Bank Service Charges
The introduction of ZiG is seen as a strategic move to stabilize the nation’s economy and restore confidence in its currency.
The legal framework for ZiG, outlined in Statutory Instrument 60 of 2024, states that the Reserve Bank shall issue ZiG notes and coins backed by a composite basket of foreign currency reserves and precious metals, predominantly gold.
“The value of one ZiG on the date of its initial issuance shall be equivalent to the value of one milligram of gold of ninety-nine per centum purity as determined by the spot price of gold, and the prevailing interbank foreign exchange rate. Thereafter, it shall be determined by the inflation differential between ZiG and the United States dollar inflation rates and the movement in the price of the basket of precious metals (mainly gold) and valuable minerals held as reserves by the Reserve Bank.” the document explains.
This gold-backed approach aims to ensure the currency’s stability and reliability.
The legal framework also goes on to say:
“The Reserve Bank shall only issue ZiG notes and coins against reserves assets actually held and managed by it, and the value of the ZiG issued and in circulation at any one time shall be anchored in and backed or covered by a composite basket of foreign currency reserves and precious metals received (mainly gold) and valuable minerals, held and maintained by the Reserve Bank in its vaults as part of the in-kind royalties.”
The decision to eliminate bank charges for accounts with less than US$100 is expected to benefit a large portion of the population, particularly those who struggle to maintain higher balances.
As Zimbabwe navigates this new financial landscape, the world watches with keen interest to see the ripple effects of these significant changes.
