Banks in crisis
http://www.thezimbabwean.co.uk
Written by Chief Reporter
Friday, 25 March 2011 15:32
HARARE – At least seven financial institutions are believed to be in
distress as the Finance Ministry steps up its onsite examinations of the
country’s banking firms.
The Zimbabwean understands the ministry has issued three “corrective orders”
to banks to try make them safe for the public and will continue to carry out
risk-based assesments until the industry is “safe and sound”. Finance
minister Tendai Biti has told the Parliamentary Portfolio Committee that
three banks are “in the intensive care unit” but he refused to say which
institutions are in a risky position.
The financial condition and performance of institutions is being strictly
monitored through “off-site surveillance” against set prudential standards,
a source said. Nigeria’s EcoBank is moving to rescue one of the distressed
banks and has already snapped up a 50 percent stake in Premier bank. Last
week Biti arranged a US$30million credit line for AgriBank, believed to be
one of the institutions in the red.
“We have been observing the risk situation and watching those sick banks
closely, and one of them is state-connected,” Biti said. The Finance
ministry’s moves come after several locally owned banks sent the financial
sector into turmoil after closure before formation of the unity government
two years ago.
Zimbabwe has seen the closure of at least a dozen private banks for alleged
fraud and mismanagement. Depositors have been left at a disadvantage as
accounts have been locked, and creditors of the banks that were affected by
closure are still waiting for confirmation if they will get any part of
their money back.