RESERVE Bank chief Gideon Gono warned on Sunday that the central bank faces CLOSURE after ordering a second round of retrenchments inside a year.

The central bank retrenched 1,500 employees in February, reducing its staff complement to just over 500, but Gono said the majority of those remaining also wanted to quit.

“We have opened up the retrenchment window again on the remaining 530 of which a significant number are eager to go. This will leave the central bank with very few people and unable to carry out its core mandate,” Gono told the Sunday Mail.

Gono has expressed concern over the undercapitalisation of the bank which is battling a debt pile of more than US$1,2 billion and warned that the bank may have to shut down unless the problems are addressed.

“Very soon we will be left with no choice but to close the central bank and the consequences of such eventuality is everybody's guess given the propensity for errant Banks to do whatever they want in the absence of a strong central bank,” he said.

RBZ staff numbers bloated to more than 2,000 during its glory days over the last decade when the bank engaged in quasi-fiscal operations that saw it financing virtually all government activities.

Gono insists keeping the printers hot helped the country survive the adverse impact of sanctions imposed by western countries, although critics say his activities helped stoke record levels of inflation.

The bank’s troubles started when the government ditched the worthless Zimbabwe dollar and Finance Minister Tendai Biti ordered it to revert to its core activities.

In December 2010, it was revealed that the Bank raided some US$83 million from the statutory reserves of local banks, US$80 million from mining firms and other exporters as well as US$20 million from the accounts of non-governmental organisations.

Some of the bank’s assets including farm implements acquired under the farm mechanisation programme have been auctioned off after the bank failed to pay for them.