PRIME Minister Morgan Tsvangirai has condemned an announcement that foreign-owned banks must relinquish control to black Zimbabweans.

Empowerment minister Saviour Kasukuwere had said Tuesday that banks should hand over a controlling stake to locals within a year in line with the country’s empowerment legislation.

The law requires foreign companies to transfer control of at least 51 per cent of their Zimbabwe operations to locals as part of efforts aimed at economically empowering the historically marginalised black majority.

But Tsvangirai said the government had neither discussed nor approved the announcement.

“There is no such government position because no such issue has been discussed and agreed upon by Cabinet. Government has not sanctioned the Minister's actions that are a threat to investment in the country," Tsvangirai said in a statement.

"The Indigenisation and Economic Empowerment Act does not empower the Minister to act and to project an image of a voracious government keen to compulsorily grab almost all institutions and companies in the country.

"We reiterate the position that the Prime Minister of Zimbabwe has executive powers and the Constitution of Zimbabwe bestows him with the authority to oversee and supervise 'policy formulation and implementation'.

“The government forum that deals with implementation of government policy is the Council of Ministers, which has not discussed or approved the purported government position captured in the public notice."

Implementation of the indigenisation programme, pushed by President Robert Mugabe and his Zanu PF party has long divided the coalition government with Tsvangirai's party claiming the policy would only benefit an already rich black elite while harming prospects of attracting much-needed foreign investment.

The central bank and the finance ministry have also voiced opposition to Kasukuwere’s move on banks warning he risks destabilising and key and sensitive sector of the country’s fragile economy.

Meanwhile, Kasukuwere’s latest deadline also includes hotels and telecommunications firms.

It follows several deals earlier this year with the country’s major mining companies, among them Impala Platinum subsidiary Zimplats, which were forced agree the transfer 51 per cent stakes local groups that included community and employee ownership schemes.

Mugabe and Tsvangirai formed a power-sharing administration six months after a chaotic but inconclusive presidential election in 2008.

The deal helped stabilise an economy in steep decline, battered by hyperinflation and foreign currency shortages. The country’s fortunes have improved since the local currency was abandoned in favour of more stable foreign currencies.