‘Prosecute errant bankers’

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A PARLIAMENTARY Portfolio Committee on Finance and Economic Planning has urged government to prosecute and effect stiff penalties on bankers and shareholders responsible for bank failures.

By Business Reporter

The chairperson of the committee David Chapfika said lawmakers were concerned with the frequent bank failures and troubled banks due to poor corporate governance and corruption.

“Issues of poor corporate governance remain endemic within the banking sector, with insider loans to directors and shareholders continuing to be pervasive and having resulted in the loss of public confidence in the banking sector,” he said.

“It is the committee’s view that culprits responsible for bank failures as a result of unethical practices be prosecuted.”

Chapfika said Treasury should closely supervise the central bank’s role on the banking sector in order to protect depositors’ funds.

“There is need for government to assist indigenous banks, which are currently receiving the same treatment as big banks, so that we do not continue to witness the reversal of the indigenisation policy in the banking sector,” he said.

The central bank cancelled the licence of Trust Bank Corporation last year due to the abuse of depositors funds by management and efforts to rectify the problem were fruitless.

Trust Bank was closed with a core capital of $1,9 million after recording cumulative losses of $18 million since its inception.

Some of the banks that are no longer operating include Royal Bank, Barbican and Genesis Investment Bank.

Official documents from the Reserve Bank of Zimbabwe have shown that seven banking institutions were being monitored under the Troubled and Insolvent Bank policy. Among the banks were Allied Bank and Metbank.

The official documents have shown that 15 banking institutions were profitable for the nine months ending September 2013 excluding POSB and losses that were registered at some banking institutions have affected the respective banks’ capital positions.

Financial institutions were faced with high non-performing loans which were likely to persist if the economy remains sluggish, the document has shown. The central bank said the average ratio of non-performing loans to total loans stood at 15,64% as at September 30 2013 from 14,15% as at end of June 2013.

Meanwhile, the committee said the proposed central bank assumption of debt was a good initiative, but there was need for transparency on these issues that impose a huge burden on taxpayers.

“The committee is, therefore, recommending to the Finance and Economic Development minister that information regarding the specific creditors making up
$1,35 billion be made public to ensure that there is more transparency and accountability with respect to this debt-assumption exercise,” Chapfika said.

11 COMMENTS

  1. I think David Chapfika should be the last person to say such things because he is a “failed banker” himself, as the former RBZ Governor GG, said. I even wonder how he even got appointed Chairperson of that portfolio committe, what criteria was used?

      • David Chapfika should stop giving us his personal options, but should report on committee resolutions as he is a failure and strangely he is appointed to chair such a portfolio. Indigenousness should not mean that we the depositors should loss our money to the so called small/black bankers when in actual fact they are looters. When you look at the lifestyle they lead whilst leading failed banks, it only tells you that they are looters and the system in Zimbabwe is only designed to arrest the poor as the rich walk free in spite of their crimes.

        He should be grateful to Chihuri and his party who sweeps crime under the carpet when its big fish and wait only after the HE to tell him to effect arrest, even then he does not arrest anyone thereafter. David should have been in jail for his bank failure as we the depositor are always at the mercy of such unscrupulous criminals like Chapfika.

  2. Chapfika is not @ best position 2 say that.Of coz gross violation of banking laws mount 2 wthdrawal of licence amongst other things,but why did the central bank increased the reserve threshold while fully aware tht there were troubling banks in system.the central bank was fully aware tht it ws not perfoming the lander f last resort.

  3. I don’t think the article was properly head lined here. the shareholders has got nothing to do with the day to day of the running of the bank henceforth for them to be arrested. the board of directors the CEO are the one that runs the bank for the good or the bad. how could central bank RBZ increase there capita reserve threshold X4 when in actual facts all the indigenous owned banks are the ones limping that could grossly affected by the move….

  4. And while you are at it David Chapfika include the heads of PSMAS, ZBC & probably many of the other heads of parastatals. How on earth can this government complain about the poor state of the economy when this ‘theft’ is being perpetrated right under their noses under the guise of salaries! . If Mugabe & his team needed a lifeline they have just been given one but will they take it ? I don’t think so. Oh yes I forgot they are going to tax salaries of $ 20,000 @ 50% – a nice windfall awaits them.

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