Indigenous banks fail to pay depositors

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ZIMBABWE’S indigenous banks have fallen on hard times as many of them are struggling to pay depositors, a situation which heightened Wednesday as evidenced by chaotic scenes at most banking halls in Harare.
At Allied Bank branch along Third Street, scores of depositors besieged the banking hall and vowed to stay put until they got their money. When NewsDay arrived at the bank around 2pm, some of the depositors were seated on the floor waiting to be attended to.
“My client deposited $1,600 last Thursday, which I am failing to access.  On Friday I received a paltry $100 and today I do not know how much I will get.  Now I cannot supply anything and this may signal the collapse of my business,” said Samson Musasa, an indigenous entrepreneur who, however, did not divulge the nature of his business.
Another self-employed depositor, Blessing Marowa who is in the shipping industry, sang the same tune.
“$5 000 was deposited into my account on Friday and I understand they (the bank) would be giving us a maximum of $50.  Everything has crashed to a halt here and no convincing explanation is being given to us,” he said.
The bank’s service support manager, who only identified herself as Grace, referred NewsDay to the bank’s CEO Stephen Gwasira for further details, but the latter was unreachable for comment.
“We are doing all we can to secure funds. At the moment we are borrowing from other banks and whatever we get will determine how much withdrawal limit we will set on that day,” she said.
Contacted for comment, Allied Bank board chairman Farai Mutamangira  said: “The challenges facing indigenous banks with regard to liquidity require a solution at the level of government. The problem is widespread. A single-handed effort may not be able to go far.”
At other indigenous banks, the situation was equally chaotic with hordes of depositors queuing outside saying they had arrived as early as 8am.
There was drama at a Mutare bank branch last week as the manager had to flee from angry depositors who had failed to access their funds. He was whisked to the police station by law enforcement agents, for protection.
Last Friday, the Reserve Bank of Zimbabwe cancelled the banking licence of Trust Bank following allegations of abusing depositors’ funds and violation of the Banking Act. The bank was also found to be critically undercapitalised with core capital of $1,90 million.Advertisement

Efforts to get comment from Bankers’ Association of Zimbabwe CEO Sijabuliso Biyam and the association’s president George Guvamatanga were unsuccessful.