THE Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono has undertaken to introduce several measures to minimise systemic risks and promote good corporate governance in the country’s fragile banking sector.
By Victoria Mtomba Business Reporter
Gono’s intervention will add on to the measures that were put in place by Finance minister Tendai Biti in the 2013 Budget.
Biti identified problems confronting the banking sector as under capitalisation of smaller banks, corporate governance issues, corrosive high interest rates, high bank charges and understated supervision and surveillance.
The measures announced by the minister include the creation of an ombudsman’s post, strengthening of troubled institutions and a good corporate governance framework.
“We may add to those measures either by way of addition or complementing them or in way of trying to refine them by coming up with an approach that seeks to see banks supporting priority sectors of the economy,” Gono said at the weekend extraordinary meeting of the Afreximbank in Harare. Measures to prioritise small players Gono said the measures would prioritise small players compared to big players in the economy and a clear definition of a small to medium enterprise would be put in place in terms of turnover and the number of jobs that would have been created.
“I believe it is more beneficial to support 5 000 small-scale miners who require $20 000 than big guys in mining who are able to look after themselves.”
Biti in his 2013 Budget said there was no country that could develop without meaningful capacity for mobilisation of domestic savings which were at least 25% of gross domestic product.
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Gono said it was still premature to say what would happen to banks that failed to meet 25% of the $100 million the new minimum capital requirements as the deadline was December 31. Gono increased minimum capital in July to $100 million from $12,5 million for commercial banks.
