By Fungai Lupande
CASSAVA Smartech Zimbabwe Limited has approached the High Court seeking to nullify the Reserve Bank of Zimbabwe’s directive to shut down its EcoCash cash-in and cash-out facilities, saying the move was unlawful.
The company argues that the directive by RBZ is ultra vires Section 10 of the National Payments Systems Act (Chapter 24:23) under which it was made.
Cassava Smartech is represented by Mtetwa and Nyambirai Legal Practitioners and the matter is yet to be set down for hearing.
The RBZ yesterday banned all cash-in, cash-out and cash-back transactions, as the platforms had become tools to extort cash and cause price instability.
The Central Bank also warned banks, mobile payment system providers and other economic agents to ensure that the entire ecosystem operates within the confines of the law and enforce compliance.
However, the shutdown, Cassava Smartech is arguing in an urgent chamber application for a temporary interdict, will cause financial loss to the company and to millions of innocent users.
Reads the application: “The directive by the defendant to shut down the EcoCash cash-in and cash-out facilities is ultra vires Section 10 of the National Payments Systems Act (Chapter 24:23) under which it purports to have been made.
“EcoCash and its facilities is duly recognised by the RBZ in accordance with the National Payments Systems Act. That recognition gives applicant and its clients a right to use these facilities.
“Section 10 only authorise RBZ to act in the event that the system has itself done or omitted to do something. The applicant is not punishable where some users are alleged to have committed abuse.
“The approach in that case is to penalise the defaulting users. There is no wrong doing by the EcoCash system or its management board so the kind of wrong doing alleged by the respondent does not fall within the power that RBZ has under section 10 of the Act.”
The lawyers also revealed that the EcoCash platform has 10 562 070 users of which 6 400 000 have been active during the last 90 days.
“Of the registered users 6 337 242 are rural customers while 4 224 828 are urban customers,” read the papers.
“From September 2011 when the cash-in facility was introduced 227 519 851 transactions worth US$10 195 546 216 plus ZW$7 542 785 610 were conducted. On the other hand, cash-out transactions worth US$8 657 704 182 plus ZW$4 142862 274 were done.
“Cash-in and cash-out facilities enable the population to deposit cash with 51 000 EcoCash agents, more than the number of banking branches.” The Chronicle