HomeLocal NewsNo U-turn on capitalisation — Gono

No U-turn on capitalisation — Gono

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Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono yesterday vowed there was no going back on the $100 million minimum capital requirements and lashed out at bankers for seeking the intervention of politicians.

Gono, who was speaking at an indaba with banks, accused bankers of “robbing the ordinary man and woman on the street to capitalise our banks” due to high bank charges and punitive lending rates.

In his Mid-Term Monetary Policy Review, Gono announced an eight-fold increase in minimum capital requirements to $100 million for commercial banks, amid fears of bank closures and forced mergers.

All banks are required to have fully complied by 2014.

Yesterday’s meeting was necessitated by a letter of complaint from the Bankers’ Association of Zimbabwe (BAZ) copied to Chief Secretary to the President and Cabinet Misheck Sibanda and Finance minister Tendai Biti.

The hiking of the minimum capital requirements has divided BAZ with some of its members disowning the dispatch to the central bank amid fears of bank failures.

In a no-holds barred meeting, Gono said “we are not interested in the fly-by-nights” in the banking sector and indicated the initial minimum capital requirement had been pegged at $250 million.

“The capital levels being demanded by the governor are to strengthen the banking sector and they meant to ensure there is social, economic and political stability in the country,” said Gono. “Only a mad person, who should not be banker for that matter, is going to stand against these requirements.”

Gono accused bankers of pushing for his ouster but declared “he was going nowhere”. He said the banking sector continued to suffer from misuse of depositors funds, liquidity challenges, short-term lending and thin capital levels.

“Since when have you become political? If you want to assist let us remove interest rates and bank charges. Let us not use reverse logic. We cannot continue using a Zimdollar mentality and a Zimdollar interest rate, Zimdollar charges,” he said.
Some banks were charging interest of as high as 58% per annum.

Gono said as a result of mistrust among BAZ members, this had led to a situation where some banks “have got silos of excess liquidity and potholes of illiquidity in some banks”.

Gono added that the mistrust had affected the interbank market.

“We must not think that the clubs we belong to are the ones to engage. Although the letter from BAZ has come, we do not know BAZ as owning a bank. It will be an issue of bank by bank. There is no licence out there in the name of BAZ.

“If you are afraid so much of the future, you should close your eyes and go into deep sleep. At this rate BAZ will not be allowed to come in here wearing the hat of BAZ,” Gono said.

BAZ president George Guvamatanga distanced his organisation from the letter purportedly written by some of the members.

“The letter does not carry the full view of organisation. As BAZ, we are still consulting on this matter, we are still to come back to you, governor, with our view as BAZ,” he said.

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