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“In view of the need to enhance financial stability, the Reserve Bank will be rolling out to the sector the Enhanced Troubled and Insolvent Bank Policy (TIBP) framework during the first half of 2013,” he said.
He said the process of rolling out the TIBP was integral in creating a comprehensive understanding of the pillars underpinning a framework of supervisory assessment methodology, as well as the benchmarks to be used when effecting various corrective options.
Dr Gono said underlying risks associated with adverse macro-economic development and mismanagement at some banks provided fertile ground for potential liquidity challenges and capital insolvency.
He said as at 31 December 2012, there were 22 operating banking institutions excluding Interfin and Royal Bank that were under curatorship and liquidation respectively.
In addition, there were 16 asset management companies and 150 microfinance institutions under the supervisory purview of the central bank.
“Although, the banking sector as a whole has been adversely affected by the aforementioned two or so weak and troubled banks, these institutions are small and of low systematic importance, in terms of the volume of assets, loans and deposits falling under their ambit. The troubled status did not, therefore, affect the entire banking sector as would have been the case if they were large banks,” he said.
He said 14 out of 22 banks had met the first level of minimum requirements by December 2012.
RBZ raised the minimum capitalisation levels for banking institutions last year with commercial and merchant banks required to have capital levels of $100 million from $12,5 million and $10 million respectively.
Minimum threshold for building societies was raised 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 institutions.
The institutions are expected to be fully compliant by June 2014 but were required to meet 25 percent of the new capital levels by 31 December last year.
Institutions that have complied are CBZ, Standard Chartered, Stanbic, BancABC, Barclays, ZB Bank and AfrAsia Kingdom.
Others include Ecobank, FBC, MBCA, TN, CABS, Tetrad and NMB.
Agribank, FBC Building Society, Trust Bank, Metbank and ZB Building Society have made significant progress while ZABG and Capital Bank still need to come up with their recapitalisation plans.
Online Reporter