The Zimbabwe Economic Society (ZES) says there is a need for an independent report on insider borrowings by Reserve Bank of Zimbabwe (RBZ) officials, who accessed loans since dollarisation in 2009, before the introduction of new banking laws that seek to silence shareholders.
The RBZ has proposed amendments to the legal and regulatory framework covering corporate governance and compliance, troubled bank resolution, consolidated supervision and financial disclosure, among others.
The central bank has announced plans to ban shareholders of banks from managing their institutions.
ZES president Lovemore Kadenge at the weekend said it was yet to be proven who had borrowed the most between shareholders and their managers or RBZ officials.
“If it is the Reserve Bank of Zimbabwe officials who are borrowing from banks, then the law should be amended and stop RBZ from such borrowings,” Kadenge said.
“The RBZ is there to protect depositors too, and there is no room for their bad debts, because if a bank fails to collect loans from RBZ officials because of fear, it can cause a liquidity crisis as the bank fails to pay its depositors.
“Furthermore if the Reserve Bank of Zimbabwe officials borrow from banks, which they supervise, can the Reserve Bank supervise banks fairly when they are receiving money from some banks and not from others.
“What happens if they fail to pay? Honestly can the referee do his job fairly when he is receiving money from some players and not from others?
“Is the removal of shareholders from management of banks meant to silence banks on such borrowing activities by the Reserve Bank officials, and make it easy for Reserve Bank officials to borrow without opposition from shareholders?”
The call by ZES comes amid disclosures by sources that several senior central bank officials owe local banks huge sums of money.
ZES said broader consultations should be made before the Banking Act was amended as there were several classes of banks and allegations shareholders abused depositor funds. That did not apply to banks that do not use depositor funds.
“Having managers only in banks, is like having the same crop in all fields.
“Zimbabwe cannot afford to have the same crop of bank managers, but needs a variety of bankers including shareholders who manage their banks,” he said.
“Any proposed change of the Banking Act must be based on the reality of what is happening, including what is causing problems. Is it the banks and their shareholders or directors, or is it the regulator working over regulating banks without addressing external business environment of banks?”