20 January 2018
Tsvangirai golden handshake confirmed
DisGrace sneaks out three luxury cars
ED cuts Bob Singapore crew from 38 to 22
Call for Diaspora Minister and MPs
ED so over confident it worries him
Priscilla demands coup ‘killings’ details
CBD maize roasting must end now: Min
Tsvangirai faces disgraceful exit: Judge
ZTA targets domestic tourism
SOE DEBATE: Privatise most parastatals
Delight as ZBC 'Iron Lady' suspended
Sulu arrested over $4,000 child support
Mapeza targets CAF CL group stages
Tendai Ndoro special - says Ajax coach
Elections: Not a moment to be lost
A view beyond the Zimbabwe coup
Mnangagwa off to Davos empty handed
Economy: the need for a paradigm shift
Government to allow foreign banks to control local units, law to cap individual shareholding
19/10/2015 00:00:00
by The Source

THE government will allow foreign banks to retain control of their local units but plans to limit shareholding of local individuals and non-banking institutions as part of measures to restore stability in the sector shaken by a spate of failures by locally-owned financial institutions.

Currently, financial institutions, local or foreign, are allowed to own up to 100 percent of local banks, while non-financial institutions are restricted to 10 percent. Individuals can own up to 25 percent.

The Banking Amendment Act currently at the second stage of reading in Parliament however, proposes to limit individual shareholdings in a bank at five percent and that of non-banking companies at 25 percent.

A company or individual would have to justify to the Registrar of Banks it is in interest of the public and the bank to exceed the proposed regulatory shareholding.

Foreign banks operating in Zimbabwe include Barclays, Standard Chartered, Standard Bank, BancABC, Ecobank and MBCA, a unit of South Africa’s Nedbank.

Zimbabwe has tightened its monitoring of the country’s banking sector following the collapse of several local banks although the central bank has maintained that the banking sector remains generally stable despite a challenging economic environment characterised by tight liquidity conditions.

Six locally owned financial institutions — Allied, Trust, AfrAsia, Capital, Interfin and Royal — have all been consigned to the ‘banks section’ of Zimbabwe’s corporate graveyard in the past three years, mostly due to non-performing loans.

State-owned Zimbabwe Asset Management Corporation (Zamco) had by the end of June taken on nearly $100 million in bad loans from banks to help restore viability in the financial sector.

The central bank has put in place a three-tier system, with banks in the Tier I strategic segment are required to have minimum core capital requirement of $100 million by 2020.

Tier 2 banks have to meet minimum capital requirements of $25 million and $7,5 million for Tier 3 institutions.


Email this to a friend Printable Version Discuss This Story
Share this article:

Digg it






Face Book



comments powered by Disqus
RSS NewsTicker