ADDIS ABABA- National Bank of Ethiopia’s (NBE) directive to limit the daily and monthly cash withdrawals for individuals and firms calls on government to advance telecom service infrastructure, commended expert.
In an exclusive interview with The Ethiopian Herald, Eyesuswork Zafu Chairperson of the Board for United Bank, said that the move the NBE has taken pays back in doing away illegal transactions and improving nation’s financial system.
“The government has been implementing a number of reforms to safeguard the fragile and inefficient banking sector. The recent decision to limiting cash withdrawal opens many opportunities to economic growth.”
Eyesuswork, also private sector advocator, said that the limit is not the amount; rather the transaction, and the issued directive could let banks and communities diversify the paying system by limiting paper cash transactions, controlling cash circulation outside of banks, as well as liquidity management and reducing printing costs.
“We have been witnessing illegal transactions in some areas that lead to tax evasion and money laundering in the market system.”
He further noted that though the establishment of the private banks, made good progress in expanding access to financial services, advancing the mobile bank transaction has not developed well.
The directive could let banks to diversifying the paying system of limiting paper cash transactions hold ensure healthy cash circulation outside of banks, liquidity management and reducing.
According to him, Kenya is more advanced in mobile banking than Ethiopian; and the nation should work more to catch up.
“The telecom sector infrastructure has not developed at the desired level to accomplish the transactions as per the demand of the clients. To address the hassle, stakes should work untiringly in greater focus.”
The government should also be committed to improve the efficacy of the sector through allocating resources and expertise to ensure productive transaction. If not, the effort could not bear fruits.
The practice of stashing is abundant so stakes should put in place meticulously communication efforts of awareness creation among communities.
Nation’s bank sector development is not as it should be for various reasons and these trade communities and institutions to remain in the regressive transaction.
The Ethiopian Herald May 27, 2020
BY MENGISTEAB TESHOME
