RBZ rectifies loan advance anomalies

Godfrey Marawanyika

IN a bid to avoid further anomalies pertaining to loan advances to financial institutions, the Reserve Bank of Zimbabwe (RBZ) this week made banks sign acknowledgement forms when they nee

d assistance.


The forms stipulate and indicate how much a firm was given and the interest rates applicable.


The loan advances the banks would be getting cover liquidity shortfalls which a number of them have been experiencing for over a month and a half.


The sudden policy shift comes hot on the heels of a central bank administrative boob which saw it advance $268 billion to Trust Bank without any written proof.


By the time of its closure, Trust’s debt to the RBZ had shot up to $1,4 trillion, largely due to interest accumulation.


Financial sector sources said initially, bankers had refused to sign the documents.


“At first nobody had explained to us why we needed to sign the documents,” sources said.


“However, we later signed the documents because right now everybody needs the lifeline to cover the liquidity shortfalls the market has been experiencing.”


The central bank had not responded to questions sent to its office for clarification by the time of going to press.


Since August, the market has been experiencing liquidity problems caused by panic withdrawals from banks by clients ahead of the September 30 deadline for new statutory reserve requirements set by the RBZ.


Banks that fail to meet the requirements will only know their fate by the end of this month when the central bank announces its third quarter monetary policy review.


The central bank’s directive that financial institutions mop up Treasury Bills floated on July 23 further compounded the situation.


In the past fortnight, the market has been experiencing shortfalls averaging at least $300 billion.


To date, the central bank has placed six financial institutions under curatorship after they were found to be financially unstable.


Meanwhile, the central bank has so far visited a number of banks to verify their $10 billion capitalisation requi-rements and shareholding structure.

The new regulatory requirements stipulate that a shareholder with more than 10% ownership should not be involved in the day-to-day running of a financial institution.


Speculation has been rife that banks that fail to meet the regulatory requirements could be forced to merge.

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