Former Zimbabwe Allied Banking Group economist David Mpamhadze said the three restored institutions face challenges in raising sufficient capital to resume operations, issuance of the licenses will boost the broader sector
Zimbabwean Finance Minister Tendai Biti has ordered the Reserve Bank of Zimbabwe to issue new licenses to three banks that the monetary authority shut down in 2005.
News reports quoted Biti as saying the government and Reserve Bank have agreed on the licenses for Trust Holdings Limited, Royal Bank and Barbican Bank. The three were placed under curatorship then merged to form the Zimbabwe Allied Banking Group. The central bank said it was moving to protect depositors and the financial system.
Zimbabwe Allied Banking Group former chief economist David Mpamhadze said that although the three institutions face challenges in raising sufficient capital to resume operations, issuance of the licenses will boost the broader sector.
Mpamhadze told VOA Studio 7 reporter Gibbs Dube that the central bank faces a difficult task in reallocating assets among the three restored financial institutions. “There is need to share the [Zimbabwe Allied Banking Group] assets among all the three banks and obviously this is going to be a serious challenge to the RBZ.”
Harare-based economist John Robertson said the financial sector is not ready for new banks as most institutions are currently struggling to meet minimum capital requirements.
The founders of Royal and Trust banks could not be reached for comment, but industry sources said they were already seeking local and international partners as they expect to be relicensed within the next few weeks.