The Reserve Bank of Zimbabwe (RBZ) says it is in the process of crafting legislation making it possible for bankers that abused depositor’s funds to be prosecuted.
Addressing bank executives in Harare on Wednesday, RBZ governor Gideon Gono said the bank would come up with a raft of measures to make financial institutions function better.
“In the context of deliberate efforts to promote the safety and soundness of the banking sector, the Reserve Bank will soon be announcing measures to assist banks on dealing with the current stock of non-performing loans,” he said.
“These measures include . . . a robust prosecution framework for all those bankers who abused depositor’s funds, but are walking scot-free.”
The central bank chief has on numerous occasions accused bankers of abusing depositor’s funds to shore up their bank balances.
Investigations into the closure of several local banks by the apex bank have shown that shareholders and directors have been abusing depositor’s funds, but no arrests have been made.
Gono recently said it had been determined that challenges associated with lowly capitalised banking institutions largely emanated from individual shareholders with overbearing influence on management.
He said this resulted in poor corporate governance and risk management practices.
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“The individual shareholders lack capacity to adequately capitalise their institutions on an on-going basis and they instead engage in gross insider abuse,” Gono said.
“The ‘incestuous’ activities of these shareholders expose depositors and are, therefore, detrimental to the financial system and economic stability.”
Gono said the new framework would also tackle the issue of high and “unacceptable” levels of interests being charged by banks.
The issue of lending to small and medium-scale enterprises, property liquidations that is becoming rampant in the bank charges and exorbitant fees which banks are currently charging and the non-payment of interest on depositor and savings accounts would be tackled in the new framework.
The RBZ also plans to introduce short-dated paper in the market to facilitate inter-bank trading and improving the central bank on-site and off-site inspections and surveillance systems.
