EcoCash wants the High Court to stop the Reserve Bank of Zimbabwe (RBZ) from suspending mobile money agents from conducting financial transactions and restore full functionality to those affected.
EcoCash is the leading mobile payment platform, and while direct payments and bill payments have not been affected, the suspension of a large number of agents has hit transactions involving cash-in and out.
The lawsuit follows the central bank's move on Monday to freeze transactions of an unspecified number of mobile money agent lines from EcoCash and suspected to have been behind fuelling recent exchange rate volatility by using their agent status to buy and sell foreign currency.
The RBZ directive issued on Monday suspended and froze EcoCash accounts and NetOne One Money accounts of agents with a monthly transactional threshold of $100 000 after transactions totalling $75 million were recorded.
The suspension of the mobile money agent lines and accounts across all networks was to facilitate investigations into potential illegal foreign currency activities.
In an urgent chamber application filed at the High Court on Wednesday, EcoCash, represented by Mtetwa and Nyambirai law firm, wants an interdict prohibiting the enforcement of the RBZ's directive issued on Monday.
The chief executive officer of EcoCash's parent, Cassava Smartech, Mr Eddie Chibi, argued in his affadavit that EcoCash has 11 million subscribers and benefits people from all parts of the country.
The RBZ action had the effect of limiting Ecocash customers from accessing its services through its agents as most of them have been suspended.
"Because of the legality of the suspension is challenged, a delay in dealing with the matter will result in prejudice not only to the applicant but also ordinary members of the public," said Mr Chibi.
EcoCash platform is the most widely used payment platform in the country and serves the unbanked in accessing financial services, which include the purchase of basic amenities such as electricity, said Mr Chibi.
It was also Mr Chibi's contention that the directive issued at a time of lockdown, will result in members of the public having to travel to transact services that they can easily access through the EcoCash platform.
Mr Chibi further argued that EcoCash agents were not heard before the directive was issued in breach of provisions of the Administrative Justice Act.
The Act requires that an administrative authority acts lawfully, reasonably and in a fair manner, which does not violate the rights of those affected by the decision.
The majority of financial transactions in Zimbabwe are conducted on mobile platforms with EcoCash accounting for about 95 percent of the mobile volumes with the remainder handled by NetOne's OneMoney.
Preliminary investigations by the RBZ's financial intelligence Unit (FIU) allegedly show that transactions valued at more than $75 million were being executed on the agent lines even though the nature of their businesses did not support such huge money movement.
What prompted the suspicion was the fact that the value of transactions remained excessively high despite the country being under the Covid-19 lockdown for the past five weeks.
The central bank wants to ensure that people or businesses with the agent lines are bona fide entities and they have to prove the source of their funds.
The FIU, which tracks financial transactions in this country, wants mobile operators to enhance their Know Your Customer framework after establishing that there is weak enforcement of this rule given the amount of suspicious transactions.
It is also understood that the intention of the blitz was to stop illegal foreign exchange transactions that could be artificially pushing the exchange rate volatility, thereby fuelling inflation.
Recently, the RBZ suspended some bureaux de change and micro finance institutions over suspected illegal forex activities causing exponential depreciation of the domestic currency.
This is widely believed to be the driving force behind a sustained rise in prices, which has seen inflation galloping to new record levels.