Trust Banking Corporation hauls Reserve Bank to court

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TRUST Banking Corporation has hauled the Reserve Bank of Zimbabwe to the administrative court to contest the decision to cancel its banking licence, it has emerged.

Business Reporter

Trust Bank lawyers confirmed that the case would be heard in court tomorrow.

The central bank in December cancelled Trust Bank’s licence over allegations of abuse of depositors’ funds.

“We will be going to the administrative court for the reinstatement of the licence that was cancelled by the [Finance] minister,” Teclar Mapote, the bank’s lawyer, said in an interview yesterday.

According to the central bank, Trust Bank had a core capital of $1,9 million and has been posting persistent cumulative losses of $18 million since its inception.

Harare High Court judge Justice Joseph Mafusire in March set aside the liquidation of Trust Bank by the central bank saying the move was unlawful.
Mafusire also ordered the central bank to meet the costs of the suit.

In February, half of the bank’s depositors submitted affidavits against the liquidation of the institution.

Deposit Protection Corporation chief executive officer John Chikura was appointed as the provisional liquidator for the bank. This is the second time that Trust Bank’s licence has been cancelled by the central bank.

The central bank said in statement the bank was unsound and had not been operating with sound administrative and accounting practices.

Trust Bank also faced liquidity challenges that resulted from the poor loan book and inadequate working capital.

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