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CFX Bank gears to reopen

CFX Financial Services is expected to reopen soon after nearly 10 months of closure amid fresh concerns on how the Reserve Bank of Zimbabwe (RBZ) has handled the banking crisis since last year.

, Arial, Helvetica, sans-serif”>The bank is likely to open in early November after restructuring its operations. Sources said it will initially open only five branches while the merchant and commercial banking divisions will operate under one roof. A capital of $170 billion has since been injected to revive the bank.

Intermarket, which had been under curatorship for 18 months, says it has regained financial stability and is already operating.

However, there are concerns about how the RBZ has handled the financial sector crisis. While some banks were put under curatorship for long periods and allowed to reorganise and recover, others had their assets immediately sold in clear violation of the law.

The Zimbabwe Allied Banking Group (ZABG) which was formed from the amalgamation of Trust Bank, Royal Bank and Barbican, now faces collapse after the Supreme Court ruled it had acquired the assets of the three banks unlawfully.

Justice Sandura said the sale of the assets to the ZABG by the curator, although authorised by the RBZ, was “unlawful, null and void, and of no force or effect”.

CFX and Intermarket were put under curatorship for long periods and have been able to recover. This is in stark contrast to Trust, Royal and Barbican which shortly after closure were forcibly amalgamated to form the ZABG.

Trust’s case was more blatant because the bank was effectively under the management of a curator for just a month. The bank was put under a curator on September 23 2004 but on October 28 the RBZ said all troubled banks, including Trust, would be amalgamated into one bank.

Later it became clear the targeted banks were Trust, Royal and Barbican. In the process instead of assuming the role of nurse, the curator acted like an undertaker by burying the banks he was supposed to resuscitate.

There have been accusations that RBZ governor Gideon Gono and government targeted entrepreneurs they did not like for political reasons.

There were also suggestions that Gono’s inconsistent and sometimes partisan application of the banking laws stemmed from a conflict of interest or hidden agendas.

In the CFX case, for example, sources say, the key shareholders are either Zanu PF or top central bank officials.

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