All the best Mangudya

HARARE - Today marks the first day of the John Mangudya’s rein at the Reserve Bank of Zimbabwe.

As the economist and banker begins his tenure in a completely different environment, totally opposed to the serene and comfortable walls of CBZ Holdings, his first port of call is to audit the bank.

While we strongly believe that Mangudya should be judged on his own record and not on the legacy left behind by his predecessors, the audit will certainly help in ascertaining the actual state of affairs and mapping the way forward.

We have no doubt that the seasoned banker has what it takes to transform Zimbabwe’s fragile financial services sector – which is riddled with systemic risks caused particularly by ‘rogue bankers’ and lack of good corporate governance.

However, there is a need for him to have an auditor’s view on all the assets under the RBZ’s arm and what they are worth.

Over the years, the central bank acquired many assets and recently disposed them remaining with a few such as Homelink, Carslone Enterprise and Tuli Coal.

Disposing these assets and sticking to the central bank’s core mandate will not only endear Mangudya to the banking public but the move will also instil confidence in the sector.

Restoring vibrancy in the banking industry will result in an increase in foreign currency deposits – which will go a long way in fighting the current liquidity crisis.

Doing this requires financial acumen so that companies which are currently teetering on the brink of collapse as a result of liquidity challenges are able to access money through normal banking channels.

The new central bank governor must also strengthen the supervisory and monitoring role of the RBZ.

The supervisory role and surveillance services are the primary mandate of the central bank and this need to continue to be done efficiently to minimise bank failures.

More importantly, Mangudya needs to also look into banks licensing, particularly the procedure and manner in which institutions like Trust Bank and Time Bank lost their licenses.

In this regard, banks will need to be prudent in the granting of loans to undeserving entities. To this end the central bank should monitor and where errant banks are detected severe sanctions and far-reaching punitive measures should be instituted.

It’s a public secret that the Reserve Bank is currently saddled with debts amounting to over $1 billion and the fact that it cannot perform the lender of the last resort function means that the new governor has a lot of juggling to do to ensure the smooth running of the sector.

Comments (3)

I wish you the best, central Bank Governor.

Martin Deporres Ngoni muparutsa - 2 May 2014

Moitawo muchinokorawo governor mungasare vamwe vachifamba nebhora

protestor - 6 May 2014

Tinemi muma prayers. Let God guide you in whatever you do. We know you are a seasoned Christian. Joshua 1:9

Tatenda - 6 May 2014

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