Bring errant bank founders to book

even to those financial organisations that had no chance in a million of paying back the loans.
In a detailed analysis of our Zimbabwean financial crisis, Dr Munyaradzi Kereke, the former advisor to the RBZ governor, gave a passionate historical perspective of bank capitalisation systems in other countries.
His conclusion was that, it did not matter what capitalisation was available to the banks but that mismanagement of banks was the major issue.
He went on to say: “The trillion dollar capital bank would still collapse if it is in the hands of rogue traders; it would still collapse if it is in the hands of boards that sleep on the job; it would still spectacularly collapse if regulated by central bankers who are deeply compromised by excessive borrowing from the same institutions they must supervise with a firm hand.”
Therefore, any debate on capitalisation of banks hinges on the central issue of whether banks are well supervised. The banks that have failed had enough depositors’ funds to be run effectively.
What happened to the depositors funds? These funds were not put to proper use, that is, to invest in viable businesses which would pay back the interest on the loans. Why is it that no list of the borrowers has been published? Why were their assets not attached to pay back the loans? Of late we are now being told that some banks are dipping into depositors’ funds to pay salaries because they have failed to generate enough interest to meet their running costs.
Another aspect many people are talking about is where the investors will come from to put their money into banks which have lost any credibility to look after depositors funds.
The major question being asked is why the money that has been borrowed is locked up in under-performing loans?
The implication is that there is no revenue creation which can be taxed to fund Government operations.
In other words, there is no revenue to pay civil servants adequate salaries or to repair the country’s infrastructure. How then can we achieve an economic growth? We have followed the grilling of officials by parliamentary committees and reports going to Parliament for debate. But there has never been any accountability by anyone involved in the collapse of banks or anyone brought to book and pays back the money borrowed. Why is taxpayers’ money wasted in these hearings with no tangible results? In other countries, prosecutions could have emanated from parliamentary hearings where Government prosecutors would be rubbing their hands waiting to take the culprits before the courts and exact real punishment for wrongdoing. But not in Zimbabwe. Who are the sacred culprits who are holding the country to ransom?
No one can volunteer to pay their taxes in such a culture of impunity. It is therefore imperative for the authorities to tighten the regulations and especially to make it mandatory that all loans given out by banks must be listed and made public by Parliament.
MPs are the people’s representatives and it is the ordinary depositor that suffers the most if the little money kept in the bank disappears.
No wonder why it has been estimated that about US$3 billion in the informal sector and has not found its way into the banks. The proof of this is the number of items that are bought for cash not from normal business but between individuals where banks are not involved.
People carry cash to buy products across our borders. One hardly sees many people at banks, maybe, only on payday. The majority of the people are building their houses, buying cars without ever visiting a bank. What this means is that banks have to reduce their staff and are facing liquidity problems as money remains with the people under mattresses. This scenario can change if people’s confidence in the banking system is restored by Parliament.
A budget committee of Parliament could have nipped the banking crisis in the bud a long time ago. Now, the country is embroiled in the constitution making process and no one is talking about the economy or even how to supervise the banking system.
How can we achieve indigenisation and empowerment of the economy when those who help themselves to depositors’ funds get away scot-free? We are not serious as a country to redress what is wrong in our economic culture.
Who do we blame for our poverty when the well connected take from the poor?