TheÂ facility which was availed to the central bank by the Finance Minister, Mr. TendaiÂ Biti inÂ December last year forÂ lender of last resort purposes isÂ understood to be facing resistance from local banks which are arguing that its conditionsÂ make it difficult to sustain operations.
According to the 2011 Mid Term Monetary Policy Statement, no draw down has been made on the facility by the financial sector since its inception in February this year due to the complicated nature of the collateral.
Bankers Association of Zimbabwe President, Mr. John Mushayavanhu while confirming that the facility has been underutilized said the failure by banks to access the facility from the Reserve Bank of Zimbabwe is an indication that local banks are financially stable as they are not seeking additional funds to solve operational challenges.
â€œBanks cannot just borrow the facility yet they are operating safely so it is an indication that no banks is in need of the funds,â€ Mushayavanhu said.
But an economic commentator, Mr. Danny Musukuma said the credibility of the Ministry of Finance in introducing a facility which is inadequate to meet the financial sector requirements at prohibitive costs is questionable in terms of commitment to restore macro- economic stability.
â€œHow did Biti come up with such a facility which I believe is just a drop in the ocean for banks,â€ said Masukuma.
The adoption of multiple currencies in the country, in February 2009, resulted in the central bank being unable to play the critical role of lender of last resort on the back of funding constraints.
However treasury in December last year availed 7 million dollars to the bank for the lender of last resort function.
The facility was opened to financialÂ institutions in February 2011, with acceptable collateral being deeds of transfer on immovable property.