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Zimbabwe Finance Minister Vows to Block Bank Indigenization

Zimbabwean Finance Minister Tendai Biti has vowed to resist moves by the country's indigenization minister to roll out the controversial black empowerment program in the banking sector, shaken this week by the collapse of two commercial banks due to serious liquidity constraints.

Sources say Biti will this week hold a crucial meeting with Saviour Kasukuwere and central bank governor Gideon Gono to discuss the consequences of forcing banks to offload shares to locals.

Kasukuwere dismissed Biti's fears, insisting "there is no going back" on the process to indigenize foreign-owned banks in the country.

But central bank sources say it’s ironic that Kasukuwere is pushing for indigenization yet he owned a major stake in Genesis Bank which has just collapsed.

Kasukuwere denied he owns shares in the bank, insisting he had long sold his stake.

Zimbabwe’s 26 banking institutions include 17 commercial and four merchant banks, four building societies and one savings bank.

Of these, the only foreign-owned banks are British-owned Barclays and Standard Chartered Banks, Standard subsidiary Stanbic, Nedbank's MBCA, Togo-based Ecobank, and CABS, a subsidiary of Old Mutual, with a combined deposit base of more than one billion dollars.

Gono is also expected to brief the meeting about the closure of two banks this week.

Biti and Gono will confront Kasukuwere and warn him against indigenizing the financial sector. Critics say Kasukuwere's program will reverse efforts to stabilize the economy.

The finance minister told VOA's Blessing Zulu he will not sanction Kasukuwere’s moves.