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Saturday, May 25, 2024

Banking sector under threat as safe box businesses emerge

Story by Stanley James, Business Editor

THE move by some industry players to opt for safe boxes when banking their United States dollars has been described as one avenue in which they are stifling economic activities and fuelling the circulation of money outside formal channels.

In any economy, banks are there to serve the needs of the banking public and ensure the circulation of money.

However, with the emergence of the safe box business, where an individual or an entity opts to have their money kept safely by a bank but not circulated in the economy, questions are arising as to whose interests are such arrangements serving.

Amid this growing trend, an economist, Dr Zack Murerwa believes such forms of financial dealings are coming at a huge cost to the economy, which is currently experiencing price and exchange rate instability owing to limited circulation of the United States Dollar.

“The emergence of safe boxes is a key cause for concern in the economy because thousands of dollars are being lodged into such safe boxes with a financial institution but it is the economy that bleeds as it is losing formal channels of money that can also impact on the economy,” he said.

Under the financial inclusion strategy, the government seeks to ensure that every Zimbabwean has a bank account and can aid the circulation of money through banking.

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