Zim Bankers Association leader says collapsed banks looted funds

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THE Bankers Association of Zimbabwe (BAZ) says the collapsed eight indigenous banks looted depositors’ funds and converted them into their private use.
BAZ president Sam Malaba also warned of prosecution of such bankers under the new banking laws which are underway.
Malaba was addressing a Transparency International Zimbabwe initiated business dialogue meeting in Harare last week.
Among the failed indigenous banks is the economic planning minister Obert Mpofu’s Allied Banks and Kingdom Bank founded by businessman Nigel Chanakira.
Malaba said the collapsed indigenous banks did not only fail to sustain themselves but had their “improperly” constituted board of directors and managers who had shares in the same banks abusing their positions to give themselves loans without following laid down borrowing procedures.
“There has also been abuse of associate companies or related parties which have enabled banks to venture into non–core banking activities and channel depositors funds to non-regulated entities such as asset management companies and investment companies,” said Malaba.
The bankers’ leader also announced that the Reserve Bank is now engaging directly with external auditors of banks to curb such corrupt activities which have also been criminalised under the Banking Amendment Bill which is yet to sail through Parliament.
Malaba said besides looting depositors’ funds there other corrupt activities that led to the closure of these banking institutions.
“A large element of their failures had been due to poor corporate governance, or deficiencies to in terms of corporate governance and some of these deficiencies relate to shareholders and senior management of banks abusing their positions using depositors’ funds for personal gains as insider loans without collateral security,” he said.