FINANCE minister Tendai Biti on Tuesday told the House of Assembly that he was going to bring substantive amendments to the Banking Act to curb bank failures.
Senior parliamentary reporter
Presenting his Second Reading Stage speech on the Micro Finance Bill, Biti said the new regulations would empower the Securities Commission of Zimbabwe to intervene, especially in instances where the entity involved was listed on the Zimbabwe Stock Exchange.
“When there was collapse at the ReNaissance Merchant Bank (RMB), it had collateral and multiple effects on all other sectors like the banking sector, the insurance sector and the Zimbabwe Stock Exchange,” said Biti.
“The regulator, the Securities Commission, had no power to go to the insurance component of the issue, but now we are giving powers that when a company is listed, the commission can come into it notwithstanding the other super regulator like the insurance regulator.”
RMB has since been rebranded Capital Bank following its takeover by the National Social Security Authority.
Biti told legislators that only 19% of Zimbabweans had access to banking services, hence the need to strengthen micro finance institutions.
According to Biti, 77 000 people share one bank branch in the country.
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“We are dealing with micro-finance institutions to ensure financial stability, but in a few weeks’ time, I will be bringing to this House substantive amendments to the Banking Act that will ensure that the experiences of the bank failures we have seen in the last 18 months in this country do not happen,” said Biti.
He said regularisation and strengthening of micro-finance institutions would help people in communal lands, growth points and townships to access financial services. He said some unregistered money lenders were charging outrageous interest rates, and were obtaining “malicious security such as bicycles, beds, mobile phones, cars, and selling these assets without court judgments’” using the “Merchant of Venice” type of lending.
