RTGS Delays Rile Tobacco Farmers

Source from:  herald.co.zw Business Reporter 06/18/2007

TOBACCO farmers are complaining over delays in the clearing of electronically transferred money (Real Time Gross System) issued by the country's tobacco auction floors saying the clearing period was making it difficult for them to access their money on time. According to the Reserve Bank of Zimbabwe regulations, RTGS transactions require a 24-hour settlement period before money can reflect in the account of whoever the transfer would have been in favour of. The farmers said instead of RTGs helping them to a safe access to their cash, it had actually became a burden to them as they were being forced to wait for more than a day as set by the central bank. Mr Chamunorwa Chiradza, a tobacco farmer from Mount Darwin, said they had been forced to spend four days in Harare waiting for the transactions to reflect although the transfer had been made before 11am as stipulated by the country's banking laws. "Farmers are being short-changed by these banks who are taking time to process their money resulting in us spending more time in the city, which is not necessary. RTGS are good but the banks have let us down," he lamented. In an interview yesterday, Tobacco Growers Trust president Mr Wilfanos Mashingaidze said tobacco farmers --- especially those in communal, resettled areas and farms situated away from the major urban centres - were finding it difficult to use the RTGS method as it entails them to spend more than two days before their can access their money. "After the commencement of land reform exercise, most banks relocated to urban centres living most rural areas under-banked. As a result, our farmers have to travel from these areas to urban areas, which is costing them a lot of money. "Add this the delays in clearing of RTGS by the banks, the system has become a nightmare for our farmers," said Mr Mashingaidze. He said RTGS remained the best option for farmers in urban areas as they reduced cases of farmers losing their hard-earned cash to thieves. Tobacco Industry and Marketing Board acting chief executive officer Dr Andrew Matibiri said the problem of delayed clearing of money electronically transferred by auction floors have been brought to his attention and TIMB was looking at ways of improving the delivery time. "The problem of delays in the clearing of RTGS transactions has been brought to our attention and we have tasked the different auction floors to contact their bankers and find a way in which the processed can settlement period can be quickened. "I know RTGS are supposed to clear within 24 hours but that has not been case with some of the transactions as the auctions floors sometimes extend their auction time to 12pm. "RTGS are supposed to be done before 11am during the week but some banks have even set 1030am as the deadline, making it difficult for our farmers to get their money within the stipulated time," he said. Dr Matibiri said his organisation was looking at ways to make sure that electronic money transfers would take only 48 hours at most as this was affecting farmers, who want to make purchases before returning to their farms. He said they would investigate cases where some banks were taking more than 48 hours to reflect electronic transfers. A Harare economic analyst said the delays in the payment of RTGS could probably be a result of congestion now that all transactions above $50 million require electronic transfers. Last month all commercial banking institutions endorsed an RBZ requirement that all cash payments above $50 million be paid in through electronic bank transfers and not cheques. RTGS is a payment and settlement system for inter-bank transactions on a gross basis in an online and real-time mode. Enditem