More than 1 000 jobs have been lost in the banking sector since 2009 owing to bank closures, a union representing banking workers said.
In a petition submitted to parliament and the Reserve Bank of Zimbabwe (RBZ) on Wednesday, the Zimbabwe Banks and Allied Workers Union (Zibawu) said bank closures have become a national crisis requiring urgent attention and action.
Nine banks have closed since 2011.
Zibawu secretary-general Peter Mutasa said bank failures were mostly a result of weak and ineffective regulatory and supervisory framework, poor corporate governance, high levels of non-performing loans and concentrated ownership.
Mutasa said other problems bedevilling the financial sector were poor risk management, the liquidity crunch, high operating expenses and regulatory arbitrage-through the use of holding companies.
“We are therefore naturally saddened by the latest turbulences in the financial sector which have led to bank closures and subsequent loss of over 1 000 jobs,” Mutasa said.
Zibawu criticised RBZ for failing to investigate allegations of improper relationships between senior RBZ officials and the failed banks as well as reform its licensing surveillance and supervisory framework and systems.
The union called on the central bank to follow provisions of the Banking Act when it comes to monitoring, inspection and investigation of banks.
Capital, Allied and AfrAsia banks closed this year amid accusations the central bank lacked the tenacity to nip the problems they faced in the bud. A number of banks have closed down since 2000 due to liquidity problems, mismanagement and economic challenges.
Zibawu wants parliament to enquire into causes of bank failures in Zimbabwe, publicise the findings and prescribe measures of bringing to book those responsible, including tracing and recovering depositors’ funds.
Parliament is also expected to urgently reform the Banking Act and audit laws on economic crimes and corporate fraud with a view to enact laws that prescribe deterrent sanctions and penalties.
“This is eroding consumer confidence in the financial system, posing sector viability challenges as well as further excluding the marginalised from using formal banking channels. This has a devastating effect on the economy as a whole,” said Mutasa.
Given the number of indigenous bank failures owing to shareholders’ abuse of depositors’ funds, analysts also feel there is a legislation gap that needs to be filled in order to bring sanity to the financial services sector.