WASHINGTON DC —
Zimbabwe's persistent liquidity crunch claimed the scalp of an indigenous bank on Thursday, forcing it to volunteer the cancellation of its operating license.
Allied Bank, owned by Zanu PF politician and Transport Minister Obert Mpofu, finally threw in the towel after battling unending financial challenges since its inception in 2005.
Announcing the revocation, the Reserve Bank of Zimbabwe (RBZ) said the institution had become a big risk to the public and investors due to undercapitalization.
“The cancellation followed a voluntary surrender of the license by the banking institution,” the RBZ said in a statement.
“The Reserve Bank has determined that the banking institution is no longer in a safe and sound condition in that the institution is grossly undercapitalized and is facing chronic liquidity challenges.”
The central bank said it will “apply for the liquidation of the institution in terms of section 57(1) (a) of the Banking Act. This action was considered to be in the best interests of the banking institution, its depositors and creditors, and the banking sector in general.”
Analysts warn the banking sector, like all other sectors of the Zimbabwean economy, faces an uncertain future given the worsening fiscal woes.