admin
It urged the banks to comply with the stipulated deadlines.
Acting Finance Minister Gorden Moyo said in Harare yesterday the new policy should be implemented in a manner that would not suffocate indigenous banks.
The minister was speaking at a meeting with bankers in Harare yesterday.
Also present at the meeting was Mines and Mining Development Minister Obert Mpofu, the majority shareholder in ZABG Bank, and Environment and Hospitality Industry Minister Walter Mzembi.
“When it came to our attention, we had a number of questions,” said Minister Moyo. “We invited the governor (Dr Gideon Gono) to give us his perspective.
“After the (Cabinet) meeting, I am here to restate the Government position.
“We appreciate the policy but as a matter of principle, the policy should not criminalise bankers. Instead, it should consolidate them. The purpose should not be to eliminate any banks but they should grow.
“The $12,5 million (for commercial banks) is low. Let us pitch our ceiling higher.”
This put to rest speculation that Government was considering reversing the policy.
Last week Dr Gono announced a phased plan for the enforcement of capital requirements for all banking institutions.
Commercial and merchant banks will now be required to have minimum capital of $100 million from the current $12,5 million and $10 million respectively.
Capital requirements for building societies were increased from $10 million to $80 million, finance and discount houses from $7,5 million to $60 million and $1 million to $5 million for microfinance houses.
The banks will be required to be fully compliant by 20 June 2014 but should meet 25 percent of the new capital level by the end of this year.
Banking institutions will be further required to be 50 percent and 75 percent compliant by 30 June and 31 December next year, respectively.
A deadline of 30 September 2012 was set for banking institutions whose minimum paid-up equity capital does not comply with the respective prescribed level to submit a detailed recapitalisation plan to the Reserve Bank.
Amendments to the Banking Act will be made to support the new regulations, Minister Moyo said.
The new minimum thresholds drew an outcry within the financial sector, which felt the new capital levels were unsustainable and not achievable.
In response to the new minimum capital thresholds, Bankers Association of Zimbabwe vice president, Mr Sam Malaba, wrote to the central bank appealing for a downward revision of the capital thresholds.
He said the increase in capital thresholds would have negative consequences for the banking sector.
Mr Malaba, who is also the managing director of Agribank, said banks would be forced to curtail lending significantly if not sure about complying within stipulated deadlines.
He added that the new levels would affect mobilisation of lines of credit.
However, Dr Gono told the bankers yesterday that the central bank was prepared to help struggling banks.
“There was a misconception that this requirement should be met overnight,” said Dr Gono.
“Let us get on with the job. If you can’t meet them, come and we will assist you. Let us stop the mischief.”
Minister Moyo also expressed concern over high interest and bank charges.
“What is happening is not sustainable. We have asked the governor to make sure that depositors are protected. The central bank will be taking steps to curtail unacceptably high interest rates that borrowers are being subjected to . . . and that bank charges and fees will be swiftly dealt with as directed by the Government,” he said.
Online Reporter