HomeBusinessVideo: ‘Workers’ funds locked up in closed banks’

Video: ‘Workers’ funds locked up in closed banks’

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About $3 million of employees’ funds have been locked in closed banks since dollarisation, the Zimbabwe Bank and Allied Workers’ Union (Zibawu) has said, advocating sterner action to stem the rot.

BY TARISAI MANDIZHA

Zibawu president Farai Katsande told journalists yesterday that the closure of banks in the country was a cause for concern, urging the Reserve Bank of Zimbabwe (RBZ) and Parliament to tighten legislation to halt such recurrences.

“To date, employees’ funds are running into millions, we are looking at approximately $2 million to $3 million being owed to workers since the dollarised period,” Katsande said.

“As a trade union, we believe that this is a matter of national interest. We have witnessed our members of the union losing their jobs and depositors losing their hard-earned money. Some of the people who are losing out are senior citizens and they have lost their life savings.”

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Zibawu has since written to RBZ and the Parliamentary Portfolio Committee on Finance and Budget on increased bank closures in Zimbabwe.

Zibawu general secretary Peter Mutasa said the union has noted with serious concern that since 1996 Zimbabwe has witnessed unabated bank closures.

“Many may have forgotten about the spectacular and unfortunate demise of United Merchant Bank in 1996 as well as the closure of Universal Merchant Bank.

“Almost a decade after, the country experienced yet another round of bank closures, this time it’s a lot more pronounced. We recall the 2003/2004 financial year when almost 10 banks were placed under curatorship and two others under liquidation,” Mutasa said.

He said Zibawu was saddened by the latest turbulences in the financial sector which have led to over 1 000 job losses stemming from the closures.

Mutasa said the cause of bank closures were weak and ineffective regulatory and supervisory framework, poor corporate governance, high levels of non-performing loans, concentrated ownership, regulatory arbitrage, poor risk management, liquidity crunch and high operating expenses, among many others.

Zibawu, however, said the RBZ should investigate allegations of improper relationships between senior central bank officials and failed banks, reform its licensing surveillance and supervision framework and proactively deal with distressed banks in a systematic manner as provided for in the RBZ Act.

Zibawu said Parliament should elevate bank closures to a national crisis requiring urgent attention, reform the banking Act addressing its current deficiencies and enact a law that protects workers who report malpractices and fraud to designated officials and institutions.

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