HomeBusiness DigestRBZ beginsmoves to cancel Trust,Royal licences

RBZ beginsmoves to cancel Trust,Royal licences

Shakeman Mugari

THE Reserve Bank of Zimbabwe (RBZ) has initiated moves to cancel the operating licences of Trust and Royal banks, a move critics said was meant to pre-empt

the two banks’ fight against the amalgamation of their assets into the Zimbabwe Allied Banking Group (ZABG).

Sources indicated that the central bank had written to the two banks’ curators informing them about its intention to close the two banks.

The RBZ is alleging that both Trust and Royal banks had ceased to conduct the class of banking business for which they were registered and that they both could no longer maintain assets which, together with other financial resources available, are no longer sufficient to safeguard their creditors.

The two institutions can also no longer maintain the prescribed amounts of capital reserves required for commercial banks, the RBZ said.

Trust and Royal banks, closed at the height of a banking sector crisis in 2004, had their assets amalgamated into ZABG in what the Supreme Court described as a “null and void” transaction with “no force or effect”.

The Supreme Court had urged Trust and Royal banks to first exhaust the domestic channels in the resolution of the dispute, resulting in an appeal to the RBZ which set up an independent panel that upheld the take-over of the two banks’ assets by ZAGB.

Trust and Royal have appealed to the Minister of finance against that decision.

Trust Holdings company secretary, Tererai Mafukidze, confirmed the latest development but said the bank would fight the central bank’s planned closure of Trust Bank.

He said the move was a pre-emptive measure by the central bank to nullify their appeal against the RBZ to the minister.

“They want to make the outcome of our appeal against the take-over of our assets that we launched with the finance minister academic,” said Mafukidze. “But we will not allow such malicious actions to take place. We are going to appeal.”

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