adminbanks and merchant banks to US$100 million, from US$12,5 million and US$10 million respectively.
Micro-finance institutions, on the other hand, will have to raise their capital to US$4 million from the current US$1 million. In its monthly economic review for August, the AfDB said the new requirements could trigger uncompetitiveness in the sector.
“The RBZ advocates for the mergers and or acquisitions by healthy banks of banking institutions with unrealistic chances of meeting the required minimum capital thresholds,” AfDB said.
“However, this has challenges that include increased market concentration, which may promote uncompetitive behaviour among the fewer resultant banks, difficulty in reconciling different organisational cultures and laying-off of employees.”
The AfDB said banks, especially indigenous ones, were likely to struggle to raise the new capital.
The bank cited poor bank performance, weak investor confidence and poor corporate governance as factors likely to make investors reluctant to inject new capital.
The previous capital requirements resulted in Genesis Bank and Royal Bank surrendering their licences after failing to meet the set minimum thresholds.
However, RBZ Governor Dr Gideon Gono argues that the move was aimed at nurturing a more stable financial system. — New Ziana.
Online Reporter
- Herald
- July 31, 2026
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