Troubled bank surrenders licence

On the other hand, Interfin Bank was placed under recuperative cura­torship for a period of six months.
Dr Gono said the direction was served in accordance with provisions of the Banking Act, [Chapter 24:20].

“The Reserve Bank took this action upon determining that Interfin Bank Limited is not in a safe and sound financial condition.
“In particular, the unsafe and unsound condition of Interfin Bank Limited is attributable to inadequate capitalisation, concentrated share­holding and abuse of corporate struc­tures, high level of non-performing insider and related party exposures, chronic liquidity and income genera­tion challenges, poor board and senior management oversight, as well as vio­lation of banking laws and regula­tions,” he said.

Also see

• RBZ to decide on Genesis Bank

• Zimre divests from Genesis Bank

• Interfin faces massive lawsuits

• Clients sue Interfin Bank

Dr Gono said the primary purpose of the curatorship is to protect deposi­tors, preserve the assets of Interfin Bank Limited and protect the stability of the financial system.

One of the consequences of placing Interfin Bank Limited under the man­agement of a curator, he said, was that the institution’s legal proceedings and the execution of writs, warrants, sum­mons, is now stayed unless the High Court otherwise grants leave.
“Another consequence is to suspend the powers of every director, officer and shareholder of Interfin Bank Lim­ited, except to the extent that the cura­tor may permit them to exercise such powers.

“The curator will takeover and assume the management of Interfin Bank Limited in such a manner as he considers prudent and most likely to promote the interests of the institu­tion, its depositors and creditors.”

Dr Gono implored the public to be patient to allow for a smooth han­dover-takeover in terms of the due process.
He said the handover-takeover process entailed securing the bank’s assets and records, ascertaining the exact balances of the institution’s assets and liabilities, drawing the institution’s statement of affairs at the beginning of the curatorship period, facilitate effec­tive control over the bank’s ICT infra­structure and ensuring availability of adequate back-up and business conti­nuity arrangements.

The curator will recommend to the Reserve Bank how the financial situa­tion of Interfin Bank Limited should be resolved.
Interfin Bank was facing liquidity challenges and was being sued by sev­eral clients seeking to recover U$30 million in deposit funds.
Genesis was one of the few banks which did not succeed in courting credible investors to meet minimum capital requirements set by RBZ.