The Bank of Zambia (BoZ) regulations to limit the sale or purchase of foreign exchange to US$1,000 per person per day must be repealed to allow for larger transactions, says the Bureau de Change Association.
In a press release reviewing the 2018 financial year, Association president Paul Kalumba explained that the central bank’s limit of US $1,000 per person per day was outdated since the real time monitoring mechanism had taken effect to combat money laundering.
“BoZ regulations limit the sale or purchase of forex to US $1,000 per person per day. This regulation was introduced many years ago. Its intended purpose was to curb money laundering. Now that BoZ has a real time online monitoring system, this regulation should be repealed and the Over-The-Counter (OTC) limits adjusted upwards. Notwithstanding that the real time monitoring system is now over a year old, BoZ has not updated the regulations to give better Over-The-Counter limits,” Kalumba stated.
He added that the BoZ’s electronic systems have also increased the cost of doing business for bureaus.
“While the electronic system is meant to help BoZ to monitor any anti-money laundering activities in the Bureau de Change sector, BoZ is passing the cost to new bureaus and new branches at K43,000 per new entry. This is over and above the annual K10,800 annual fee and the K5,400 branch application fee. This increases the cost of doing business and it also makes it difficult for Zambians who may want to join the sector,” Kalumba explained.
“The new law regarding audit fees has also negatively impacted the sector as the audit fees have now significantly increased, making it very difficult for small entities to operate profitably.”
The BoZ introduced the new real time system over a year ago, which connects all Bureau de Change in Zambia to BoZ, meaning that all bureau transactions are now monitored in real time, making it a first for any central bank in southern Africa, according to Kalumba.
BoZ is able to monitor all transactions in real time, which makes anti-money laundering monitoring effective.
Meanwhile, three new bureaus were registered last year, bring the total number of registered Bureau de Change to 81 in the country.
According to Kalumba, Golden Coin Bureau de Change remains the largest branch network with 18 centres across the country.