|
Paidamoyo Muzulu
THE High Court has ruled that the Reserve Bank of Zimbabwe (RBZ) acted unconstitutionally by appropriating about US$5 million from the Zimbabwe Revenue Authority (Zimra) accounts held at CBZ and Standard Chartered Bank in 2009 without following proper procedures.
Justice Anne-Marie Gowora ruled recently that the Reserve Bank’s action was illegal and ordered the central bank to return the money it raided from the revenue authority’s accounts. The RBZ has since said it would appeal against the ruling.
Zimra approached the courts demanding that the central bank refund various amounts taken from its foreign currency accounts.
The RBZ raided US$2 466 735,15 from Zimra’s Standard Chartered Bank account number 8740507099000; R2 473 417,57 from account number 9440507099000; £55 900.82 from account number 2840507099000; 3 061 euro from account number 9340507099000 and BPW 139 527.61 from account number 1340507099000.
From Zimra’s CBZ accounts, the central bank took US$1 857 044.00 from account number 01120772590020 and R2 807 759.00 from account number 01120772590040.
In her ruling, Gowora said: “In the premises, it is my finding that the respondent did appropriate the monies in question outside the provisions of the constitution and the applicant is entitled to a refund.”
Zimra had argued that the money held in the accounts in question constituted revenue collected under Section 4 of the Revenue Authority Act. This money does not belong to Zimra but to the Consolidated Revenue Fund in accordance with the provisions of Section 101 of the constitution.
The central bank had argued that it was the function of the RBZ to advance the general economic policies of the government as provided for in Section 6 (i) (d) of the Reserve Bank Act.
“It was contended further that in terms of Section 8 (1) of the same Act, the respondent (RBZ) may be called upon to meet settlement of ‘government’s payment obligations’,” reads Gorowa’s ruling made available this week.
However, the RBZ could not divulge what the money was used for arguing that it was protected by the Official Secrets Act.
The case arose at a time when the central bank had no board after the previous board’s tenure had expired in 2008. A new board was only appointed in April 2010.
Gowora found the RBZ argument inappropriate and relying on a judgment by former Chief Justice Antony Gubbay on a matter involving the principle of “set-off” of debts between two parties.
In that judgment, Gubbay ruled: “There are, however, two important exceptions to the operation of the rule. A debt owed by one department of the State cannot be set-off against a debt owed to another department. A set-off cannot be raised against taxes due to the fiscus or where goods are sold for the benefit of the State.”
Gowora adjudged: “From my reading of the papers, it seems that the respondent there is an implication from the respondent that in view of the fact that the two entities are under the control of the Minister of Finance, then monies can be transferred between them without the need to follow statutory requirements.”
However, the court absolved RBZ governor Gideon Gono of any wrong-doing saying he was wrongfully cited in the case.
The RBZ appropriated millions of dollars from foreign currency accounts of individuals, non-governmental organisations, farmers and mines. These amounts are now reflected as debts, that amount to over US$1,5 billion in the central bank’s books.
lMeanwhile, Gono told guests at the Independent Dialogue in Harare on Wednesday that the state of the country’s banking industry remained relatively satisfactory even though the banks were still not sufficiently capitalised and required large inputs to remain afloat.
Gono revealed that at the end of March, five out of the 25 banks had failed to meet the minimum regulatory capital requirements. This excludes the POSB, which is regulated under a separate instrument.
Gono revealed that Kingdom Bank, Royal Bank, ZABG, Genesis Investment Bank and ReNaissance Merchant Bank remained under-capitalised and were struggling to meet the minimum capital requirement of US$12,5 million for commercial banks.
ZABG had a negative balance of US$9,2 million while Genesis Investment bank had a negative balance of US$331 000. ReNaissance, which is now under curatorship, had a negative balance of US$16 million. Royal Bank had a balance of US$2,7 million and Kingdom Bank US$4,5 million.
The RBZ will meet all undercapitalised banking institutions to determine the way forward
Although the other commercial banks showed a few positives by meeting the minimum capital requirements, commercial banking earnings were likely to remain fragile.
TN Bank had a capitalisation of US$12,546 million, Agribank US$12,8 million, recently re-licensed Trust Bank US$13,358 million and FBC Bank US$15,2 million.
Topping the list was CBZ Bank at US$50 million, Standard Chartered at US$35,5 million, Barclays Bank at US$31,4 million, Stanbic Bank at US$29,1 million, BancABC at US$28,3 million, ZB Bank at US$20,9 million, Interfin at US$19,5 million, NMB at US$18,8 million and MBCA at US$16,2 million.
Gono said banks were likely to be at best cautious with underlying risk-weighted-asset growth given the fragility of the Zimbabwean economic recovery, political uncertainty around impending general elections and evolving regulatory capital requirements.
The RBZ set a June 30 deadline for financial institutions to meet capital requirements of US$12,5 million for commercial banks and US$10 million for merchant banks.
“The Reserve Bank of Zimbabwe expects these banks to finalise their capitalisation initiatives and contribute meaningfully to economic growth and development, otherwise there won’t be further social justification for existence of these banks if they are not servicing their communities effectively,” said Gono.
 |
Show/Hide comments
Show/Hide comment form
