The central bank in Zambia is represented by the Bank of Zambia. It is entrusted with the responsibility of designing as well as executing monetary policies. These monetary policies are expected to stabilize economic growth in Zambia. The Bank of Zambia was established in the year 1964.
After the Bank of Zambia Act was introduced in 1965, the bank has performed its functions well and has managed to live up to its reputation. The bank has the credit of acquiring equity stake in Zambia National Commercial Bank and Development Bank of Zambia.
At one point of time, the bank of Zambia was also planning to explore the agriculture sector.
Bank of Zambia and its functions:
Bank of Zambia acts as a fiscal agent on behalf of the government.
Formulates monetary policies and implements the same.
Different institutions offering financial services are governed by the bank.
Supervision and regulation of different banking operations to guarantee a well grounded financial system.
Currency of Zambia as legal tender is issued by the bank of Zambia. Zambian currency consists of banknotes and coins.
The Zambian currency is known as Kwacha. It is divided into 100 subdivisions, referred as ngwee.
Denominations of Zambian banknotes:
Zambian banknotes of denomination K20, K50, K100, K500, K1000, K5000, K 10,000, K 20,000, K 50,000 are available.
Coins of the following denominations are available. They are 25N, 50N, K1, K5 and K10.
Bank of Zambia’s Payment system:
The bank has Zambian Interbank Payment and Settlement system also known as ZIPSS. This is an electronic system, wherein every transaction for settlement is processed in real time. The ZIPSS system was introduced to curtail fraudulence involved in checks of high value. It ensures faster transaction, which are also secured. Bank of Zambia uses the ZIPSS as a tool for settling transaction.
Advantages of the ZIPSS:
There are many advantages of availing the ZIPSS. Prominent ones are as follows:
Every settlement transaction is monitored throughout the day in real time.
The “cleared fund” can be readily retrieved as transaction takes place faster and by the electronic mode.
Last Updated on : 25th June 2013