Portfolio Committee Report on Bond Notes Bill

3.0 Committee’s Observations and Recommendations

3.1 The Committee noted that the primary objective of the Bill is to give legitimacy to the bond notes and coins in circulation after the expiry of the Presidential Powers (Temporary Measures). In order to achieve the objectives set out in the Bill, the Committee recommends the following measures stemming from the observations from the submissions received during the consultations: The Bill should provide for penalties for those individuals and corporates that do not accept bond notes and coins as legal tender. Stiff penalties should also be imposed on those found exchanging the notes at a different rate other than the one stipulated in the Bill. The Committee proposes that the Bill should provide a mechanism for recourse at the expiry of the guarantee. This will instil confidence in the public. The Committee observed that some banks have stopped the use of ATMs, much to the prejudice of the banking public. It is recommended that the Central Bank and the banking sector ensure that bond notes are dispensed from the ATMs. In order to address lack of confidence, the Committee recommends that the Executive continues with its publicity campaigns so that all the concerns being raised by the citizens are addressed to achieve total acceptance. The Committee recommends that the Governor of the Central Bank publishes, on a quarterly basis, information relating to the value of exports generated and the corresponding value of bond notes and coins paid to the exporters. The Executive should also consider establishing a Committee which includes representatives of business and labour which limits the issuance of bond notes.

3.1.2 The public must be urged to continue using plastic money so as to ease pressure on cash requirements. To allay the fears of the informal sector, the Government should provide assurance that they

will continue to have access to the foreign currency. The Committee therefore recommends that the informal traders should be encouraged to open bank accounts to facilitate access to foreign currency. The Committee recommends that measures be put in place to ensure that legitimate travellers and business people including the informal traders have access to the US dollar. However there is need for limits to be set for withdrawals abroad in line with the minimum daily limits, as measures to curb externalisation by unscrupulous dealers. The Committee observed that Government’s policy inconsistencies and lack of understanding of the bond notes on the part of some government officials and citizens has not helped the situation. The resultant overall effect has been lack of confidence with the bond notes. It is therefore recommended that Government continues with its publicity campaigns.

4.0 Conclusion

4.1 Subject to the above recommendations, the Committee supports the approval of the RBZ Amendment Bill. I thank you.

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