Banking sector will come out of the woods: Mangudya

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This may trigger a series of withdrawals from banks by clients resulting in a serious liquidity crunch.

RESERVE Bank Governor John Mangudya yesterday told Parliament that he was optimistic that the banking sector will soon come out of the woods, adding that the liquidity challenges currently blighting the sector were caused by the negative perceptions created by people who failed to repay their loans.

VENERANDA LANGA
SENIOR PARLIAMENTARY REPORTER

He told the Parliamentary Portfolio Committee on Finance and Economic Development that banks were in a sound state and it was only those people who took loans in 2009 and failed to re-pay them who undermined the appetite for lending and caused hitches in the circulation of cash in the banking sector.

“We are moving back to basics whereby we just do our core functions as an institution, and the liquidity conditions in this country are tight, but to us it is a symptom of negative perceptions which have affected confidence levels,” Mangudya said.

Mangudya said the Reserve Bank of Zimbabwe was planning to establish a National Credit Reference Bureau which would enable banks to detect bad debtors.

He also said the RBZ Debt Assumption Bill which settles the $1,35 billion RBZ debt was gazetted and is now before Parliament, adding it would help the RBZ to start on a clean slate and go back to basics.

“We have made progress in moving the government bank accounts from CBZ to RBZ and between now and July 15 we should be able to move the accounts. We are also mobilising resources so that at least we are able to assist banks in need of funding. We want to protect depositors’ funds so that they are used for those purposes and we are fund-raising to ensure we are lenders of last resort.

“The country should continue with the multi-currency system. We cannot decrease capital requirements of $25 million for banks and we want to put more emphasis on quality of assets of a bank and that is why we are establishing a credit reference bureau. We also believe Finance minister Patrick Chinamasa is working on demonitisation of the Zimbabwean dollar,” he said.

Mangudya said the use of the recently introduced multi-currencies like the Chinese yen, Indian rupee and Japanese currency had been very low with few bank accounts opened in those currencies although it was permissible.

4 COMMENTS

  1. as we have been saying all along ,this governer is just the dumbest of all we have ever had,we have a liquidity crunch because of negative perception created by bad debtors,so what he is saying is moey is there its people lying that cash is not there so I cant pay .kkkk,my question would be if that’s the case sir where is it ,stored in their houses or barried in some hole somewhere in chiendambuya.due to capital flight after elections ,credit began to dwidle ,as more companies that otherwise would have raised money on the capital and money markets failed to do so ,so they went to the banks and borrowed there and considering they don’t borrow for current expenditure ,but capital and those capital goods being imported it meant ,double jeopardy ,as capital left due to the perception on the new government and importation of new equipment bought in china or Germany etc,still this was money going out, to further compound the situation is that we are a consumer based nation and we continue to import with hard ,at times unbanked currencies, this coupled with corruption and a government that gives one unproductive office 200million to globe trotte the globe with an entourage that spend s millions on a trip, and bring home suitcases of designer clothes,to ask them what did you bring pounds or euros, they claim one man made a speech to all nations,so what did that produce, they say the commander in chief and first secretary of zanu pf,in essence no production,no capital or foreign inflow just taking their politicking to other lands so as to solidify their political reliance back home.mangudya was responsible for giving the president during the GNU 21million per trip,sa banker did he think he was pumping it into the economy becoz the receipient has zim1 on his importmobile???????

  2. the man is a zanu by heart he wants to prescribe the wrong drug to a wrong ailment just as all zanu mafia do kunyepa chetd

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