gono 11-11-10.jpgThe Reserve Bank of Zimbabwe (RBZ) has issued a 14-day ultimatum to five financial institutions to comply with the minimum capital requirements or face closure.

The stern warning from monetary authorities comes amid reports that several financial institutions are facing viability constraints owing to several factors hence their failure to meet the minimum capital requirements.

Presenting his Monetary Policy Statement to bankers in the capital, RBZ Governor, Dr Gideon Gono said the extension of deadlines is not an option hence the need for struggling financial institutions to surrender their operating licenses by the 14th of February.

Although five financial institutions are facing the chop, Dr Gono said the banking sector is safe and sound with a few challenges that relate to volatile deposits as well as weak corporate governance.

Dr Gono also announced measures that encourage financial institutions with balances in foreign banks to bring the money into the economy for other sectors to benefit from the estimated US$400 million.

Maximum cash withdrawals have been pegged at US$10 000, with any excess requiring permission from bank authorities.

Under the minimum capital requirements from the central bank, commercial banks are required to raise US$12,5 million while merchant banks and building societies are required to raise US$10 million.