Khartoum / Amsterdam — Report by Suleiman Siri for Radio Dabanga
On Monday, the Central Bank of Sudan issued a decision to raise the ceiling for daily transfers between banks via interbank bank accounts from SDG 1 million to SDG 3million. Experts say this is due to inflation for people to cover basic life necessities.
The bank explained, in a statement seen by Radio Dabanga, that the decision comes within the framework of its efforts to expand the provision of electronic banking services, and in implementation of the state's policies towards digital transformation.
Follow us on WhatsApp | LinkedIn for the latest headlines
Banking expert Ibrahim Ahmed Jibril attributed the reasons for the decision to the fact that the level of inflation is the main motive for increasing the volume of bank transfers, and said: It was necessary to reduce the digital value of the currency by a zero.
Jibril added in his interview with Radio Dabanga: "The gradual approach to raising [the exchange rate] was not taken to avert any risks that might arise, especially in the trade of hard currencies." He continued, saying: "This requires oversight from the Central Bank's regulatory body regarding the nature of the repeated transfers and verifying them."
He considered that digital commerce is the safe and modern trend, with the need to monitor cash deposits and set a ceiling for them. He added: After that, its source is verified with documents to combat money laundering, which is the biggest risk of any economy to unjustified price increases, and this may go beyond that to security risks.
Banking expert Ibrahim Ahmed Jibril pointed out that oversight is usually carried out according to instructions from the Central Bank, with inspection teams monitoring implementation and huge fines in case the bank violates this.
Expanding the Central Bank's Capabilities
For his part, economist and former Director General of the Capital Markets Authority in Sudan, Dr. Shawqi Azmi Mahmoud, described the lifting of the ceiling on transfers between banks as a positive measure.
In his interview with Radio Dabanga, he expressed his hope that the Central Bank of Sudan, through its companies concerned with this matter, will be able to expand its capabilities in the coming period to attract the largest possible number of individuals to open bank accounts and use ATM cards instead of resorting to cash transactions.
Azmi said that reliance on cash is a real problem that still exists in many countries that are underdeveloped in banking, while countries that have achieved development in this field do not use "cash" except in a very limited scope, which is what we aspire to reach, so that the volume of liquidity within the banking system is dominant, and not liquidity outside it, since the presence of liquidity within the banking system contributes greatly to curbing inflation rates.
He considered the Central Bank's raising of the amount of money transferred between banks from SDG 1 million to 3 million to be a normal thing, in light of the Sudanese currency losing its value, and to meet the size of the daily expenses that individuals bear.
He said: "If we assume that one million Sudanese pounds is equivalent to less than $280 in the parallel market, then this amount does not meet or cover the needs of citizens in their basic life necessities."
He considered that raising the minimum to three times is a good step to meet daily expenses and various needs, especially since this volume of transfers does not affect the trading of dollar prices in the parallel market, because an amount of three million pounds is also a small amount and does not constitute a significant value in the US dollar market.
Banks were subjected to destruction:
Economic expert and Director General of the Capital Markets Regulatory Authority in Sudan, Dr. Shawqi Azmi, said that the banking system in Sudan cannot be considered to have been fully functioning since the outbreak of war on April 15, 2023, until now, for many reasons, including the clear destruction of some banks, the loss of large amounts of liquidity as a result of looting, and the damage inflicted on their technological infrastructure.
Resumption of clearing
He pointed out that this led to the suspension of clearing operations managed by the Central Bank, which serve as the link between bank branches and are administered through the Central Bank. He continued, saying: Consequently, the issuance and deposit of company checks into various accounts ceased. Trade between individuals was also severely impacted, and withdrawals were significantly reduced due to the shutdown of ATMs located in workplaces, markets, and other public spaces.
Azmi added that this had a negative impact on banking activity, and led to the activity being limited during that period to a specific bank, which he did not name, but he indicated that this bank may have controlled the majority of banking activity in Sudan.
He considered that the return of checks and the resumption of clearing operations would certainly lead to a boom in trade operations, but he added: However, some very important guidelines must be observed in the check issuance process.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
He specified those guidelines that these checks must be "secured and magnetic" as was the practice previously, and to search for the most secure means for them, in addition to activating the laws related to bounced checks and those without funds, or those that may be issued for the purpose of deception and robbery.
Azmi expressed his belief that the country will face many problems in the coming period, especially since some states are still experiencing the effects of wars, as well as being out of police control, which could lead to some individuals disappearing as a result of seizing other people's money.
He stressed that this requires caution and vigilance from businessmen, traders and factory owners, both in the way they use checks and in the mechanisms for receiving them, especially noting that trade between states was previously active and large, while this matter now requires strict control and a kind of self-security follow-up.
Economic expert Shawqi Azmi pointed out that anyone fleeing with goods in exchange for worthless paper checks would pose a major problem for business people.
