By Staff Writer
TIME Bank of Zimbabwe Ltd, the first locally-owned commercial bank, is set to re-open 17 years after its closure, which has since been declared unlawful.
In a statement this week, Time Bank said the stage had been set for re-opening, 24 years after it was first licenced in 1997, commencing operations the same year under the leadership of founder, Chris Takura Tande.
The bank became the first locally owned commercial bank in the country and established itself on the market before other local investors moved into the sector which was at that time, dominated by foreigners.
However, a number of banks were closed by the Reserve Bank of Zimbabwe in 2004 for one reason or another and Time Bank also had its banking licence cancelled, a decision which it contested in the courts.
In a protracted legal battle, Time Bank disputed the reasons for its closure and cancellation of its licence and became the first bank to take RBZ to court over the illegal cancellation of its licence.
“Standing the test of time, in order to deliver economic empowerment to both yourselves and ourselves through innovative banking services, an exciting time is coming,” Time Bank said.
After its unlawful closure, the RBZ took about US$5 million from Time Bank, creating financial problems for the commercial bank.
Time Bank requested RBZ to refund the money and the former Governor of RBZ Leonard Tsumba agreed to refund the money but his term of office ended prematurely before the money had been reimbursed.
Tsumba’s successor, Gideon Gono reneged on the decision to refund such money to Time Bank which then applied to court to compel RBZ to do so in early 2004.
After litigation started, RBZ responded by closing Time Bank and putting it under a disputed curator.
At that time, Time Bank argued that it appeared as if it was being punished for demanding its money back. During the period of curatorship RBZ then illegally cancelled Time Bank’s licence in 2006 and the latter responded by applying for reinstatement of its licence.
In 2009, the court reinstated Time Bank’s licence but it could not operate because the RBZ refused to hand over the assets, documents and affairs of Time Bank in the normal way at the end of curatorship.
RBZ and the former curator of Time Bank could not account for all assets and documents and this resulted in further legal disputes.
Time Bank, however, distinguished itself from all the banks that were closed by paying its depositors and employees their full dues.
Time Bank said it was probably the only bank in the banking history of Zimbabwe which managed to pay all such depositors and employees their full amounts without borrowing from RBZ or getting new money from its shareholders or from Deposit Protection Corporation or raising new deposits in order to pay old depositors.
“This showed that the bank valued its clients and staff members despite the difficulties it was going through. It further showed that the bank, despite its problems, had enough financial resources to pay its creditors hence such a bank did not deserve to be closed,” the bank said.
In 2015, the central bank chief John Mangudya, after hearing from both sides of the dispute, negotiated and entered a settlement agreement under which RBZ agreed to refund the US$5 million which had been taken unlawfully from Time Bank before it was closed
RBZ and Time Bank further agreed to complete the handover/takeover of the assets and documents.
The apex bank then issued a notice to the public advising that Time Bank and RBZ had resolved all their legal disputes and that Time Bank could now operate.