Be careful with banks - Gono

HARARE - Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono has maintained his stance on the indigenisation of foreign-owned banks insisting government should be cautious in dealing with the “delicate” institutions.

In presenting his 2013 monetary policy statement yesterday, Gono said while the banks should observe the laws of the country including the Indigenisation Act, “the process… should, however, take cognisance of the sensitiveness around the operation of the banks to restore confidence, trust and stability in the sector.”

 “One size fits all does not work,” the central bank boss said, who looked to be oozing confidence of the 2004/5 era which had disappeared in the last few years.

He said the central bank was working together with the Indigenisation ministry “to ensure that compliance with appropriate laws is done in an orderly manner.”

“Any pronouncements that encroach into the financial sector will remain pronouncements until they know who to consult,” Gono said adding that, he will not keep quiet or fold hands while there are “frequent and flagrant attacks by some who are not as knowledgeable as us.”

Gono’s statements come as Indigenisation minister Saviour Kasukuwere has intensified pressure on foreign-owned banks to comply with the controversial empowerment law.

The law compels all foreign-owned companies, without exemptions, to cede at least 51 percent shareholding to locals.

Last week,  Kasukuwere said the institutions could leave the country if they were reluctant to comply.

There are four foreign-owned banks currently operating in the country namely Standard Chartered Bank, Barclays Bank, Stanbic Bank’s Stanbic, and MBCA — owned by South Africa’s Nedbank.

“Barclays Bank, Standard Chartered Bank and Stanbic Bank’s behaviours are appalling and if they want to pack and go they can do that because they are not of benefit to us,” Kasukuwere was quoted as saying in the media.

“After mining, we will go to banks because how can we leave a situation whereby someone is sitting on over $3 billion and the country cannot fund agriculture?

I cannot give the time period when we expect to complete the indigenisation process, but it is not Kasukuwere, it is the law,” he said.

Meanwhile, Gono said a total 14 banking institutions out of 21 met the December 31, 2012 deadline to increase capital to a minimum $25 million.

Last year, the RBZ boss announced phased recapitalisation deadlines for banks to achieve a minimum equity capital of $100 million by June 30, 2014.

The first phase was to increase minimum capital to $25 million from an initial $12, 5 million.

The second phase deadline is June 30 this year where banks are required to have $50 million.

Banks are required to increase their minimum equity capital to $75 million by December 31 and eventually fully comply by June 2014.

He said all banks submitted their recapitalisation plans by September 30 last year.

Gono said five institutions had not complied, but had made significant progress towards compliance.

In his banking sector review, Gono said the prevailing liquidity crisis coupled with the absence of an active interbank market, limited access to affordable external credit lines and absence of lender of last resort compounded the operating environment of banks.

“…the country’s banking sector remains generally safe and sound,” he said.

A top banker who attended the presentation said: “Gono was looking charged up and exhibited confidence and authority in subject he is an authority. He dealt with a wide range of issues core to the banks’ mandate and gave sound advice to government.”

Gono was flanked by his former lecturer, Antony Hawkins now board member, and other members of the Bank’s Monetary Policy Committee. - Eric Chiriga, Business Editor

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