The Reserve Bank of Zimbabwe on Thursday booted out ReNaissance Merchant Bank (RMB) chief executive officer Patterson Timba and placed the bank under curatorship for six months effective on Thursday.
The development follows investigations by the central bank which unearthed systemic abuse of depositors funds, among other irregularities.
Reggie Saruchera of Grant Thornton and Camelsa has been appointed the curator.
Speaking at a media briefing in Harare yesterday, Reserve Bank of Zimbabwe governor Gideon Gono said the decision to place RMB under curatorship followed investigations into the bank that revealed deficiencies, including inadequate capitalisation, inappropriate shareholding structure and disintegration of corporate governance structures.
“In the interest of financial sector stability, the Reserve Bank has today issued a corrective order requiring RFHL (ReNaissance Financial Holdings Limited) and RMB to institute mandatory measures to address identified gross corporate governance deficiencies and imprudent banking practices,” Gono said in a statement.
“In order to preserve the financial resources of ReNaissance Merchant Bank, and further, to prevent the uncontrolled withdrawal of funds and assets from RMB, the banking institution will close its doors to the public on 3 June 2011 for a period of two weeks to facilitate the curator’s assumption of effective charge of the bank.
“Accordingly, ReNaissance Merchant Bank will reopen its doors to the banking public by Monday 20 June 2011 under the management of the curator.”
The bank was found to be technically insolvent with a negative capital of $16 659 725,31 as at April 30 2011, against the prescribed minimum capital requirement of $10 million for merchant banks.
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Gono said while it was not the central bank’s wish to place banks under curatorship, it would not stand by while the situation got out of hand.
“The Reserve Bank wishes to warn the entire banking sector against indulgence in fraudulent and other undesirable activities bent on abusing depositors’ funds for selfish motives. We stand ready to conduct incisive examinations and/or investigations on every banking institution that is not compliant with the letter and spirit of banking laws and regulations,” said Gono.
Other executives booted out include Dunmore Kundishora, Norest Kwete, Tatenda Madzingo, Lydia Timba, Lovemore Moyo and Robert Tindwa.
