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Government to tighten bank ownership regulations

21/12/2012 00:00:00
by Roman Moyo
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GOVERNMENT is working on amendments to the Banking Act to ensure that no single individual holds more than five percent in a bank, Finance Minister Tendai Biti said Friday.

Issuing a state of the economy update, Biti said there were also considerations to control the amount of money that a bank shareholder can borrow to manage financial institutions liquidity status.

“No individual will be allowed to own shares more than 5 percent in a bank,” Biti said. “As for companies, they will be allowed to have a stake of up to 25 percent.”

Treasury is also working on major amendments to bar shareholders from occupying positions in executive management and the boards of banks.

"That has to stop. If you are a shareholder, go and play golf. Let other people run the bank for you both at management and board level,” Biti said.

The move, Biti added, is meant to transform the banking sector and strengthen corporate governance.

He said the overhaul of the Banking Act would look at oversight, stress tests, and capital requirements if there is need for a review and corporate governance.

Biti said he was expecting the country’s revenue to reach US$3, 9 billion by December 31, adding that some US$247 million had been collected in November alone. The year-on-year figure currently stands at US$3, 5 billion.

“In December we are expecting revenues of about US$400 million,” he said.

Zimbabwe’s total revenues for the third quarter amounted to US$902, 3 million compared to US$771, 1 million in the first quarter and US$825.9 million in the second quarter.

Biti said the country was in line to meeting its December inflation target of 4 percent.

He bemoaned that the country was spending millions on imports, urging more local production.

During the period under review, total imports amounted to US$2 billion compared to US$1, 7 billion recorded in the corresponding period in 2011. This translates to a 17, 6 percent increase.

Most of the imported goods are raw materials, equipment and food stuffs.

In the third quarter, total exports were valued at US$1 billion compared to US$754 million declared in the second quarter, representing a 32,6 percent increase.

“This increase has been largely attributed to the surge in tobacco exports in the third Quarter,” Biti explained.


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