News24

Gono orders hike in banks capital base

2012-08-01 12:33

Harare - Zimbabwe's central bank on Tuesday hiked 10-fold statutory capital requirements for merchant banks to $100m to restore confidence in the banking sector following last week's collapse of a local bank.

The rates are also applicable to commercial banks, which previously needed just $12.5m while those for merchant banks were increased from $10m.

The banks have two years in which to raise the capital, but must by year end have doubled their current capital base.

"By the end of this year commercial banks must have no less than $25m as capital," central bank governor Gideon Gono, said in his mid-term monetary policy in the capital Harare.

The new measures come days after Royal Bank, a commercial bank was closed last week due to undercapitalisation, and liquidity crisis.

"Indiscipline in the banking sector has once again reared its ugly head. This is evidenced by increased abuse of depositors funds," Gono said.

He reiterated that banks must not be targeted by the country's indigenisation laws which forces foreign owned companies to cede majority stakes to local blacks.

Gono said Zimbabwe's economy remains fragile with low export earnings, lack of credit lines or foreign direct investment resulting in the liquidity crunch.

"The economy is facing a crisis which cannot be ignored. There is need for action. We are in a deep crisis,"he said.

"In an environment where companies are closing day in, day out and there are no exports but there are huge imports particularly in consumptive goods, the day of reckoning is not too far."

Gono said the country was mulling the introduction of treasury bills of between 90 days and a year to improve liquidity in the economy.

Comments
  • BigChiefPlumbPudding - 2012-08-01 13:51

    Laughable to see them running around trying to find solutions and plug the holes. Run rabbit run, but they will never admit they were wrong, or move toward the obvious solution because that would mean conceding that those evil colonials weren't so bad after all.

      teboh.rapheal - 2012-08-01 14:46

      bigchiefplumpudding that is the idiology cultivated and sustained by satanic aryans to promote the domination and decimation of others.the colonialist were not that bad?in the first place did colonization existe or occupation?did germany occupy or colonized france?this power of conception in your hands give you aryans excessive power to manipulate people.very unrepentant people you are .while talking about forgiveness and negating the crimes you commited worldwide.but keep this in mind we are not going to forgive or forget.the battle continous untill we are free with the capacity to creat chaos in your lifes when ever you attack us .for it is not the last time you will do this.savage stealing and expliotation is now deeply rooted in the heart of your leaders and some of your unpardonable people.very soon you will come in with propaganda like democracy blablabla.but the bones of my ancestors are listening from the bottom of the sea.who lives shall see

      BigChiefPlumbPudding - 2012-08-01 16:03

      Get help teboh, you're on the edge. You sound just like Hitler when he was trying to justify his hate for the Jews. You're a radical extremist - please grow up.

  • Vickela Mumby - 2012-08-01 14:58

    Eish!

      BigChiefPlumbPudding - 2012-08-01 16:04

      Yes, Eish indeed.

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