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 Zimbabwe’s financial sector depositor confidence continues to be under threat on the back of bank closures and the placement of some financially troubled institutions under curatorship.
With research showing that more than five banks have closed operations since 2004, some experts claim the problem emanates from irregular dealings within the financial sector.
Recently, Genesis Investment Bank surrendered its operating license and was subsequently closed while Interfin was placed under curatorship.
In all this, focus has tended to be on the affected bank while the depositors have become the biggest losers. It has emerged that depositors from the closed banks have in many instances failed to get their repayments.
Although relevant authorities have assured stakeholders of workable policies to monitor the operations of the banking industry, the recent exposure of Interfin Bank as well as Genesis Investment Bank to serious funding problems has raised questions on the commitment by regulatory authorities to facilitate a safe and sound banking climate.
A management consultant, Mr Cecil Madondo says the fiscal and monetary authorities should consult stakeholders on workable instruments to plug off loopholes that are allegedly being used to abuse depositors’ funds.
As official data from the central bank shows that more than US$2 billion is circulating outside the formal banking channels, the transacting public says it will be a tough task for the financial sector to tap such funds due to the continuous exposure of some banks to liquidity constraints.
A labour consultant, Mr Memory Nguwi says once a bank closes operations due to funding challenges, the major focus is on the repayment of funds to depositors.
The exposure of some banks to funding problems is emerging as major problem in Zimbabwe’s banking industry.
While explanations will always be given, the naked truth is that the perpetrators of such economic crimes have gone scot free due to the absence of clear cut laws which deal with such problems.
But what measures are being put in place to address these legal short comings? To what extent are the relevant authorities monitoring banks?
Meanwhile, as parliamentarians and those in the industry look for answers, how long will depositors continue to suffer after every bank’s closure? And in all this, will the financial sector ever be able to recover from a battered image and loss of confidence by the banking public?
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