By Success Majaramhepo:
Econet Wireless spin-off, Cassava Smartech has opted out of its court challenge against the Reserve Bank of Zimbabwe’s directive to limit its EcoCash mobile money functionalities.
The RBZ on Monday last week directed mobile money operators to stop cash-in and cash-out options, prompting EcoCash – the biggest platform – to file for an urgent interdict against the central bank’s directive at the High Court which had set Friday as the date for the hearing.
Tawanda Nyambirai of Mtetwa and Nyambirai law firm representing EcoCash, said by phone on Monday that the Smartech Company had opted not to proceed with the court case against the RBZ. This was because John Mangudya, governor of the RBZ, on Thursday reversed the ban on cash-in and cash-out but also set a strict ZWL100 limit for mobile money cash-outs.
“We cancelled the court case because the RBZ has complied with our demands, so it was of no sense to go to the court,” Nyambirai said.
Econet had threatened to shut down the entire Ecocash System in order to comply with the directive to disable cash-in and cash-out functionalities. The central bank had also asked payment service providers to curtail cash-back facility.
“Ecocash and its facilities is dully recognized by the RBZ in accordance with National Payments Systems Act. The recognition gives applicant its clients a right to use these facilities. Section 10 only authorize RBZ to act in the event that the system has itself done or omitted to do something. The applicant is not punishable where so e users are alleged to have committed abuse,” read the application.
Cassava had argued in its court application that the directive by RBZ was ultra vires Section 10 of the National Payments System Act (chapter 24:23) under which it was made.
“The approach in that case is to penalize the defaulting users. There is no wrong doing by the EcoCash system or its management board so the king of wrong doing alleged by the responded does not fall within the power that RBZ has under Section 10 of the Act,” said Ecocash in its application.