Finance minister Tendai Biti yesterday told Parliament the Reserve Bank of Zimbabwe (RBZ) was reeling under a debt of $1,5 billion, including money owed to ordinary people in respect of foreign currency accounts.
Biti said this while answering questions in Parliament and was responding to queries by Zvishavane-Runde MP Larry David Mavima (Zanu PF), who wanted to know if the assets at the RBZ were being disposed in line with the State Procurement Board regulations.
“We have a very big problem at the RBZ. As a result of that, at some stage their quasi-fiscal activities were at 35% of Gross Domestic Product and the bank had expanded beyond its mandate,” said Biti.
“The bank had gone beyond its mandate of formulation of monetary policy and seeing to the stability of the Zimbabwean dollar. And, while it was doing everything, it became an extension of Treasury and in the process acquired a huge portfolio of non-core roles like mining,” he said.
Biti said the non-core activities were the ones that resulted in the bank accumulating the $1,5 billion debt.
He said the RBZ accumulated the massive debt during a time when the Banking Act stated 10% of all bank deposits should be deposited at the RBZ.
“We abolished that last year, but 40% of commercial banks are actually book-owed by the RBZ. However, the Reserve Bank of Zimbabwe Amendment Bill passed in March 2010 in this august House says the RBZ should dispose of all quasi-fiscal assets and proceeds towards the payment of liabilities of the banking sector,” said Biti.
He said what the RBZ was currently doing in disposing of their assets was in tandem with the requirements of the law passed in Parliament and the proceeds of what they sold would be appropriated towards liquidation of statutory reserves.
