RESERVE Bank governor Gideon Gono is soon expected to name financial services institutions that failed to meet the minimum capital requirements as some players restructure to remain afloat.
Gono’s Mid-Year Monetary Policy Statement will focus on the status of the banking sector after the central bank failed to issue statement following the expiry of March 31 deadline for minimum capital requirements of the sector.
The varying capital requirements, now in United States dollars which came after last year’s adoption of the multi currency system have resulted in some institutions disposing “non-core” business while others were taken over by more financial stable partners.
Businessdigest has over the past three weeks reported shareholder changes in asset management companies that restructured after the March deadline.
When contacted for comment on how many financial services institutions had complied with statutory capital requirements, central bank spokesperson Kumbirai Nhongo said: “The status of the banking sector and the regulation of asset management companies are issues to be discussed by the Governor of the Reserve Bank of Zimbabwe, Dr Gideon Gono in his forthcoming Mid-Year Monetary Policy Statement.”
“The central bank is therefore not able to comment on these issues now, as to do so would pre-empt the policy statement,” he said.
The central bank has so far cancelled an operating licence for Legend Asset Management after it failed to meet the first phase of the minimum capital requirements. By September 30 last year asset management firms were expected to meet the US$250 000 threshold.
In April MBCA Holdings Group disposed of 96,14% interest it held to a consortium of investors led by former Premier Finance Group CEO Exodus Makumbe.
Meanwhile, the Securities Commission of Zimbabwe (SCZ) says the US$500 000 capital requirements set by the central bank has resulted in asset management companies having a “keen interest” in being regulated by the commission.
Currently the central bank is in charge of regulating the capital investment companies until negotiations to transfer this regulatory role to the SCZ are finalised. This, according to Chirume, is in line with the Securities Commission Act.
“We are very aware that asset management companies are very keen to come to us. Asset management is a tough game. If new players want to come in, I wish them good luck.” said SCZ CEO Alban Chirume on Monday.
“They (asset managers) said they were looking for a regulator who understands them. They also said they are looking for regulatory arbitrage — a regulator that would make things easier for them. Because they are not deposit taking institutions, they were taking a lower risk in relation to their capital requirements.”