CENTRAL Bank Governor, Gideon Gono said Wednesday he would seek President Robert Mugabe’s intervention as the row over the takeover of foreign-owned financial institutions escalated after Empowerment Minister Saviour Kasukuwere ordered the banks to transfer majority control to locals within a year.
Gono, who is out of the country on business, has launched a scathing attack on Kasukuwere and National Indigenisation and Economic Empowerment Board chairperson, David Chapfika, saying they were not “fit and proper persons” to be involved with banks.
“The fact that the two main proponents of the recent illogical moves have presided over the failure of their two banks before, namely Unibank and Genesis, calls for Solomonic wisdom on the part of Zimbabwe’s population and leadership,” Gono said in a statement on Wednesday.
“Ordinarily, anyone who was near a failed bank is not a fit and proper person to deal with banking matters or to ever own, run or talk about the ownership of a bank again until cleared by the central bank; his is a universal practice.”
Chapfika was involved in the collapsed Unibank while Kasukuwere was reportedly one of the shareholders in Genesis Bank which surrendered its licence after failing to meet the minimum capital requirements.
Gono said President Mugabe would give final direction regarding Kasukuwere’s notice ordering foreign banks to reduce shareholding in their local operations to 49 percent, which he dismissed as “devoid of detail and rationality”.
“The Zimbabwean banking sector needs to be advised that there is no law that provides for arbitrariness on the part of anyone and/or expropriation of banking assets in Zimbabwe yesterday, today or tomorrow,” he said.
“I will soon be consulting with and obtaining further guidance from President Mugabe on the latest moves by the Minister in relation to the sector that I superintend, the Banking Sector, and his instructions will be final in the manner in which we will proceed.
“Until such guidance is received from the President, we regard the regulations as gazetted as devoid of detail and rationality as they are contradictory in many respects with existing laws in the country such as the Banking Act and the RBZ Act which stand at par with any other law in the country except the Constitution of the Republic of Zimbabwe.”
Gono, along with Finance Tendai Biti have long opposed Kasukuwere’s bid to force banks to comply with the indigenisation legislation, warning the programme could destabilise a key economic sector.
Kasukuwere says he is simply implementing the law and accuses the foreign banks of undermining economic recovery and growth by refusing to lend to black Zimbabweans. British-based Barclays and Standard Chartered banks as well as Stanbic, which is owned by South Africa’s Standard Bank, dominate the sector.
Gono said the RBZ was ready to issue new licences to individuals keen to own banks, giving the example of Mines Minister Obert Mpofu who now owns ZABG bank.
“As the Reserve Bank, we repeat our earlier invitation to any Zimbabwean wishing to start a bank to come forward with their application and we will give them a licence to join the sector at 100 percent ownership than waste money taking over other people's banks,” he said.
“The example of Minister of Mines Dr Obert Mpofu who came forward with his money and sought permission to take over ZABG bank which was ailing then is a case in point.
“We gave him two years within which to regularise the ownership structure of that bank to a maximum of 25% for any single shareholder which he committed to do but for the time being he has put in money and is a 99,9 % shareholder.”
Gono, who has been pushing an alternative empowerment model, said the money is banks did not belong to foreigners but to the depositors adding that the foreign equity component was no more than 20 per cent.
He repeated earlier warnings that Kasukuwere’s forced equity transfers would not benefit the ordinary people insisting: “You do not need to be a rocket scientist to realise that someone is (trying) to take Zimbabweans for a ride!”
The RBZ chief also dismissed claims he was protecting foreign banks because they had advanced loans to his family businesses.
“It has falsely and mischievously been suggested in some quarters that as governor, I am protecting the foreign banks because I owe them huge amounts in the form of loans given to my family business entities,” he said.
“Well, for the record, my family and I have had business dealings with Barclays and Standard Bank dating back to 1977 (Barclays), 1980 (Standard Chartered), 1996 (Stanbic Bank). At present, I do not owe any of these banks a single penny by way of loans or facilities.”