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Royal surrenders banking licence

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Reserve Bank of Zimbabwe governor Gideon Gono yesterday said Royal Bank had surrendered its banking licence, but declined to give further details saying the central bank would issue a full statement on Monday.

Gono made the disclosure while addressing delegates attending a Confederation of Zimbabwe Industries annual conference in Nyanga where he warned against forcing foreign-owned banks to cede 51% of their shareholding to locals as required under the countrys indigenisation policy.

However, at a Press conference held at the central bank offices last night, the Registrar of Banking Institutions, Norman Mataruka said Royal Bank had been using depositors funds to meet operating expenses.

They were undercapitalised. They had $1, 9 million in capital and were making cumulative losses of $5, 8 million up to the end of June,said Mataruka.

The bank also had chronic liquidity challenges and outstanding RTGS (real time gross settlement) were $1,3 million.

They had no capacity to meet payments for depositors and so depositors have been going there only being allowed to get $50. Since its inception, 92, 9% of their portfolio has not performed, he said.

Mataruka said they had at one time identified a potential suitor (CBA from Kenya), but nothing transpired.

The RBZ said they will, in conjunction with the Deposit Protection Corporation, institute liquidation proceedings in order to facilitate payments to depositors and other creditors.

In a separate statement dated July 27, Royal Bank board chairman Peter Chikumba confirmed they had voluntarily surrendered their banking licence to the RBZ.

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