gono6.jpgThe Reserve Bank of Zimbabwe has extended the deadline for under-capitalised banks compliance with the required capital thresholds to end of this month. 

According to official information from the central bank, the extension of the deadline for the minimum capital requirements for under-capitalised banks from 14 February this year to March 31 is being made to ensure that the financially troubled banks raise the required $12 million.

While ZBC News is reliably informed that some of the under-capitalised banks are in the process of finalising fresh capital injection deals with potential local and external investors, the central bank has however revealed that financial institutions that will fail to comply with the deadline are likely to have their operating licences withdrawn.

An economic commentator, Mr. Godfrey Dupwa says while the extension of the capitalisation deadline might come as a relief for the under-capitalised banks, there is need for the troubled financial institutions to also consider merging operations.

“We do not know more but something should be done for the benefit of the financial markets,” said Dupwa.

Although Zimbabwe’s financial sector is being considered safe and sound, economic observers warn that there is need to facilitate adequate capital reserves in order to restore depositor confidence as research by the monetary authorities show that more than US$3 billion is circulating outside the formal banking sector channels.