Bank licences legalised theft

After the shenanigans unearthed at ReNaissance Merchant Bank (RMB) last year where, again, a Reserve Bank investigation unearthed wholesale looting of depositors’ funds, the public might have thought such an occurrence was now a thing of the past. But, alas, it has been proven wrong by reports that Interfin Financial Services’ major shareholders and their cahoots looted Interfin Bank to a shell.

While the goings-on at both RMB and Interfin border on the criminal and one dare say, obscene, as depositors’ hard-earned funds are abused willy-nilly, there seems to be no punitive action by the authorities to dissuade would-be offenders from doing the same.

It is beyond debate that, had this infamy been committed elsewhere in the world, the culprits would already have been put behind bars, with heavy sentences and/ or fines. They would wish they had not touched a dime. However, in Zimbabwe, we never learn from the past and we have always ignored the signs, even when they were there for all to see.

Against such a background, one wonders whether abuse of depositors’ funds, as we have witnessed in the Interfin and RMB cases, are lesser crimes that can easily be pardoned with a little regulatory spanking from the Reserve Bank and not the country’s justice system.

If this ghost is not exorcised now it will soon become acceptable that in Zimbabwe, a banking licence is in fact a “licence to steal”. This will be tragic as the banking sector is key to mobilising both foreign and local investment critical to the country’s economic recovery.

As one of our readers quipped, these are the results of having too many overrated briefcase bankers with no ethics at all. Others have suggested that  all insider (directors/executives) loans should be banned. And if these directors are forced to go to another bank for loans, then proper risk assessments should be carried out. As it stands, these executives just dish out funds to themselves with reckless abandon, in many cases from a pool of depositors’ funds.

The scale and modus operandi of the looting at RMB and Interfin leaves one wondering, where were the authorities? Where were the lawmakers, and more importantly where are the law enforcement agents? Clearly, in order to stop this wanton abuse of the public’s trust and confidence in banks, authorities now need to start taking tough action against bank shareholders and managers who steal depositors’ funds. This cannot go unpunished.

It is time the authorities drew a clear bold line between an insider loan and outright theft and ensure offenders face the music for their misdeeds. At present, this line is blurred and the fuzziness allows looters of peoples’ savings and public funds to get away with a little more than the embarrassment associated with few adverse newspaper reports, a slap on the wrist by the regulators and off they go in luxury cars to their posh houses, to enjoy their ill-gotten wealth, with no penalties.

This is not merely crying over spilt milk, these events are fresh and real and there is an opportunity for the authorities to re-look at the precedents that have been set for previous offenders in this country. If anything, authorities’ failure to bring these crooks in suits and ties to book last year has openly buoyed other indigenous bank owners to go for the easier route of making money — steal depositors’ funds as nothing serious will happen to you.

Unlike the petty thieves roaming the streets, indigenous bank owners, have been legitimised by a banking licence, an opulent boardroom where decisions to steal more money are made and banking halls filled with beautiful smiling clerks. This has become the new legalised theft. Authorities must stop this systematic economic sabotage and halt dead in their tracks these thieves in imported designer suits masquerading as bank executives.

Zimbabweans now need to know that the next bank they put their money into is not just another Ponzi Scheme.

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