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EcoCash seeks legal interdict against central bank directive

EcoCash seeks legal interdict against central bank directive

Cassava Fintech, the Econet spinoff which holds the EcoCash mobile money platform in Zimbabwe is seeking an interdict against the government's decision, via the country's central bank, to halt cash-in and cash-out mobile money functionalities.

While the ban affects several platforms, including One Money and Telecash, EcoCash is understood to have 6.4 million active subscribers and could be impacted the most.

The application for a temporary interdict argues that ZSE-listed Cassava is especially important as the EcoCash platform carries 6.4 million active users against 10.5 million registered subscribers.

About 6.3 million of the registered subscribers are in rural areas that have limited access to alternative financial services, it adds.

"This application is intended to temporarily stop the continued implementation of the respondents' directive pending the determination of the legality or otherwise of the directive (to disable cash-in and cash-out," said Cassava Fintech in its application.

Legal representatives for EcoCash argue that the directive by the Zimbabwean central bank are against the country's National Payment Systems Act as the "abuse (of cash-in and cash-out) is attributable to some customers of the applicant and not the system of the applicant or the management board" of the applicant.

In its directive, the central bank argued that mobile money cash-in and cash-out functions were being abused by economic agents buying and selling cash at high premiums.

The central bank added that this was not in the interests of the national payments system.

EcoCash's legal representative Mzokuthula Mbuyisa said, "The respondent's (RBZ) decision is irrational in that it seeks to penalise even the innocent users of the applicant's system instead of identifying the abusers and dealing with them on a case-by-case basis."

In an affidavit attached to the interdict application, Edmore Chibi, chief executive officer at Cassava , argued "cash-in and cash-out facilities constitute rights in property that the applicant and the users of EcoCash cannot be compulsorily be deprived of" especially given the over reliance of Zimbabweans on digital financial services.

The High Court in Harare is expected to deliberate.

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