Gono gives banks two-week ultimatum

should finalise their capitalisation initiatives by 14 February or ship out.
He proposed that those that cannot meet the regulatory minimum capital requirements should consider mergers as he had repeatedly advised. In other instances shareholders needed to dilute their stake to inject fresh funds to save banks instead of clinging to their shareholding.
Among the affected banks are Royal, ZABG and Genesis Investment Bank.
“I warn very strongly these institutions to desist from playing politics because there is no politics in our management of things. We shall act without fear or favour regardless of your shareholding structure,” said Dr Gono.
“The message also from the Minister of Finance (Tendai Biti) is that the idea of clinging on to ownership structures which have no money or capacity must go because you will be swept under with your 100 percent shareholding.”
There were instances in the banking sector where founding shareholderrs were reluctant to offload significant portions of their equity to more liquid investors.
Kingdom Bank, initially on the list of undercapitalised banks, announced last week it had concluded an agreement with AfrAsia Bank for an injection of $9,5 million to enable it to meet the required capital.
“All non-compliant institutions, including those previously issued with special dispensations for compliance with minimum capital requirements have up to 14 February 2012 to finalise their recapitalisation or consummate their mergers and acquisitions,” he said.
Renaissance Merchant Bank is still under curatorship as efforts to recapitalise the troubled bank continue. Dr Gono said he had extended the curatorship period to 3 March.
Barbican Bank’s licence expired on 30 September 2011 but the bank has since appealed to the Ministry of Finance against the central bank’s intention to cancel its licence after failing to resume operations within the stipulated 12 months.
Commercial banks are compelled to have a minimum capital threshold of $12,5 million while merchant banks should have $10 million.