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02/02/2015 00:00:00
by Business Reporter
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FINANCE minister Patrick Chinamasa has accused local entrepreneurs who try to venture into the banking sector of lacking principles and failing to respect depositors.

Zimbabweans have little confidence in locally-owned banks as many lost their savings after several of the institutions collapsed over the years.

The failures have been blamed on poor management including the loss of depositors’ funds to insider loans given to directors.  

Speaking before a parliamentary committee on budget and Finance Monday, Chinamasa said “it is painful to see how indigenous banks are managed” as they lack a professional culture and, hence, they crumble.

“It is very painful when you hear that a banking licence has been cancelled... you would call and request for the period to be extended but this has to do with our culture.

“How we manage banks. You would find that most indigenous are the ones lending out money without a strategy,” said the minister.

At least six locally owned banks have so far folded due to liquidity challenges and two more are on the brink of collapse.

The latest to close shop was Allied Bank which was linked to Transport minister, Obert Mpofu.

“We have a lot of work to do when it comes to having the right culture for the banking sector,” said Chinamasa.

“I see it whenever I interact with management and bank owners, you can tell that this is a manager and this one is the owner.

“For most foreign-owned banks, the decision is made far away and after interacting with the management.

“They will have to communicate with the owners of the institution and that brings accountability ... this is something that we have to work on and improve among our people. We need discipline in the sector.”


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