TIME Bank Investment Company (Pvt) Ltd (TBIC) has called for the establishment of an independent body to look into banking issues and operations of the
Reserve Bank of Zimbabwe (RBZ), saying the cancellation of its banking licence was an abuse of power and unlawful.
TBIC is the holding company of Time Bank of Zimbabwe Ltd.
TBIC is contesting the cancellation of Time Bank’s licence by the Registrar of Banks.
“We have established that Section 14 of the Banking Act referred to in the notice of cancellation of the registration of Time Bank of Zimbabwe Ltd does not permit the Registrar of Banking Institutions or the Reserve Bank of Zimbabwe to cancel a bank licence or registration without giving the bank concerned 30 days’ notice to object or lodge an appeal with the Minister of Finance,” TBIC board said in a statement.
It said neither the curator nor the directors and shareholders of Time Bank consented to the cancellation or requested it.
“Therefore the action of the Registrar of Banking Institutions clearly violates the Banking Act, in particular Section 14(3),” said the TBIC board.
The board added that Time has been treated unfairly by the central bank before.
It said Time Bank’s account in the Reserve Bank books was wrongfully and unlawfully debited by Reserve Bank staff.
The board said they were forced to settle the matter in the courts after several attempts to have an out of court settlement failed.
“Following the court case, Time Bank was put under curatorship under unclear circumstances,” TBIC said.
It said the developments confirm the worldwide view that there is a need to reform banking laws and provide checks and balances on the operations of central banks.
TBIC said this would avoid abuse of power, which was not good for the economy particularly a developing one.
“In particular, there is a need to avoid a situation where the player is also the referee.”
The RBZ has also been embroiled in disputes with Trust and Royal Banks over their forced inclusion in ZABG.
The central bank was forced to establish an independent panel to investigate the issue but the two banks are contesting the panel’s verdict.