Zimbabwe central bank tightens control

Zimbabwe central bank tightens control

GIDEON GONO: Zimbabwe's Reserve Bank chief has caused a financial sector clean-up since taking over last year

• Zim huts down fleeing tycoons

• Amnesty for Zim banks

• End of era for forex dealers

• Gono new RBZ governor

• Tea boy to national purse

By Ryan Truscott

ZIMBABWE'S central bank governor announced new measures to tighten the operation of locally-owned banks, blamed for plunging the country into economic crisis.

In a statement to review progress of a key monetary policy unveiled last year, central bank chief Gideon Gono said bank owners would no longer be allowed to hold management positions.

"In the spirit of promoting greater transparency and accountability, no shareholder with 10% or more will form part of the institution's management, nor chair that (bank's) board," Gono said.

Some managers of Zimbabwe's 17 banks were reported to also be major shareholders before the current clampdown by the central bank.

All banks would have to comply with the new regulation by September 30, Gono said in comments broadcast live on state radio and television.

The latest announcement comes after several of Zimbabwe's emergent banks were earlier this year placed under the direct control of the central bank due to liquidity problems.

Thousands of depositors were unable to withdraw their savings as a result and many reportedly were returning to well-known international banks such as Standard Chartered, Stanbic Bank and Barclays Bank.

The banking crisis was seen as a major blow to efforts by Zimbabwe to have a home-grown banking sector but Gono Wednesday gave assurances that the sector was in a sound state.

"We want to assure the banking public that the financial sector as a whole remains safe and sound," said Gono.

He dismissed accusations that the central bank was undermining the policy of so-called indigenisation of the economy.

"Our support and enthusiasm to help indigenous banks does not however imply that we will cast a blind eye at indiscipline, or create a separate, softer banking code for one type of bank," he said.

Gono's policies caused waves in the Zimbabwean economy, which reached their peak this year with the arrest of several high-profile bankers and businessmen for alleged financial crimes, including funneling foreign currency abroad.

The banking chief said the central bank would not be extending an amnesty to others in the country who may have broken the law.

"We reject suggestions that a blanket amnesty be extended at this stage of our clean-up exercise to those who externalised our foreign currency under one disguise or another," he said.

"Besides, the granting of an amnesty is the prerogative of the head of state."

In his statement Gono reported an improvement in foreign currency inflows, from US$302 million for the whole of last year, to US$333.5 million in the first three months of this year.

He said this could be attributed to the success of a foreign currency auction system, which has seen locals receiving rates of around US$4,500 to the Zimbabwe dollar as opposed to the official rate of 824 to the greenback.

The banking chief added that those among the 3.4 million Zimbabweans living abroad who wanted to remit their money back home through official channels would be given an even better rate of 5,200 Zimbabwe dollars to the greenback- AFP
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