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Banks remain sceptical

Dumisani Ndlela

THE banking sector remained sceptical after escaping penal bonds whose take-up had been tied to their balance sheet sizes, with bank executives saying th

ey feared policy changes could take place in an increasingly uncertain environment.

Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono, battling a deepening economic crisis, suspended an earlier decision compelling banking institutions to take up economic stabilisation bonds and reduced take-up on financial sector stabilisation bonds after banks raised fears of bankruptcies.

Banking sector sources said while they believed they had the governor’s word on the new policy decision, they feared that the lack of a written undertaking by the governor remained unsettling.

Moreover, they said, Gono’s warning that he could reform his market management strategies pointed to imminent policy adjustments that could unsettle the banking sector.

Gono last Friday wrote to bank executives calling upon the financial sector “to take the initiative to meaningfully finance agriculture through optimisation of their asset allocation frameworks”.

This was after government awarded a number of resettled farmers 99-year land leases.

Gono said since the banking sector had been averse to lending to agriculture without certainty of collateral, “the 99-year leases, therefore, come as a laudable answer to the financial sector’s concerns”.

He said the central bank’s desire to see financial institutions increasing their exposure to the agricultural sector had been the reason why part of the stabilisation bond had been set aside.

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