Union blames RBZ for bank collapses, demands investigations

Spread This News

THE union representing bank workers has petitioned parliament, the finance minister and the Reserve Bank of Zimbabwe (RBZ) demanding investigations into the collapse of several financial institutions amid allegations of plunder and insider loans as key causes.
The petition was presented to the parliamentary committee on finance and budget, bank workers represented by the Zimbabwe Banks and Allied Workers Union (ZIBAWU).
The union argues that the key reason why most banks are crumbling is due to the obscure relationship of senior central bank officials and banks executives of the collapsed financial institutions.
“If the allegations that senior RBZ officials are amongst the list of clients not servicing their loans in the failed banks are correct, then this must be interrogated and stopped,” the union said.
The workers claimed that the central bank has not been carrying out its mandate in terms of the Banking Act when it comes to monitoring, supervision, inspection and investigations of Banks.
“In some cases such as AfrAsia Bank, Allied Bank and IDBZ (Infrastructural Development Bank of Zimbabwe) the union even wrote to the central bank expressing our reservations on certain transactions but these issues were not investigated or we were not advised of the outcome of the investigations if there was any,” the petition read.
Over the past 12 months, six banks have collapsed, among them, Kingdom Bank which was now known as AfrAsia, Allied owned by Zanu PF minister, Obert Mpofu, Tetrad, Capital and Interfin.
According to a central bank report, several more financial are not safe as they are battling the current liquid crisis and poor corporate governance.
The current wave of collapses in the banking sector comes a decade after a similar experience was witnessed in the country and ZIBAWU suspects that this is a result of flawed laws and poor corporate governance.
“Of late, banks are actually surrendering their licences out of their own volition,” said the union.
“This tends to give executive and non-executive board members an opportunity to further plunder the assets of the bank prejudicing depositors, creditors and other stakeholders.
“We are saddened by the number of workers who continue to lose jobs and livelihoods as well as the number of depositors losing their hard earned savings.”Advertisement

The union said over 1200 jobs have been lost due to the current collapse of banks and demanded that parliament enacts a law which protects them from victimisation if they report any malpractices by central bank officials and individual bank executives.
In their petition, ZIBAWU stated that, last year, an AfrAsia worker was fired after reporting to the central bank that the bank’s management had written off their loans – a development which exposed the institution to viability challenges and helped hasten its closure.