HomeNews‘RBZ, pay your debts’

‘RBZ, pay your debts’

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The Bankers’ Association of Zimbabwe (BAZ) said the Reserve Bank of Zimbabwe should first repay at least $70 million statutory reserve money to banks urgently in order to restore confidence in the financial sector.

Appearing before the Parliamentary Portfolio Committee on Budget, Finance and Investment Promotion on Monday, BAZ president John Mushayavanhu said the money owed by the central bank was in various currencies including rands, euro and United States dollars.

Statutory reserves are State- regulated reserve requirements held by the central bank.

Mushayavanhu said each time a deposit is made into a bank a fraction is supposed to remain in the bank to form the statutory reserves.

“The first priority is to restore our financial sector such that when a bank fails it’s not because it is owed by the Reserve Bank, but because they don’t have proper governance.

“It’s a debt sitting on the books for the past two years, in accounts it is a non-performing debt,” he said.

He said the issue of statutory reserves could become a budgetary issue to restore confidence in the sector.
“Pay the banks their $70 million and this money can create at least $50 million for lending,” he said.

Mushayavanhu said the central bank should address the issue of company foreign currency accounts (FCAs) garnished resulting in most of them struggling to operate.

He said the association held a meeting with the Ministry of Finance and suggested the ministry could perhaps come up with Treasury bills to the tune of $70 million.

“As we speak, banks cannot trade with each other. If we form Treasury bills we will encourage trade in the sector,” he said.

Responding to questions on why banks allowed the central bank to “invade” people’s FCAs, Mushayavanhu said: “As banks we were also not happy. We made representations, but they were played down in national interest.”

The central bank has a debt of over $1 billion and is in the process of disposing its non-core assets in seven companies to raise funds part of which will be used to settle debts.

The RBZ is in the process of shedding off 58,75% in Tractive Power Holdings, 70% in Tuli Coal, 50% in Transload, 64,9% in Astra Holdings, 65% in Scientific Research and Industrial Development.

The Homelink and Carslone Enterprise 100% shareholding will also be disposed.

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