Business / Companies
Interfin Bank curatorship extended
13 Jun 2013 at 22:33hrs | Views
INTERFIN BANK will remain under curatorship until December 31 2014 amid indications that its capitalisation and subsequent reopening has been hampered by macro-economic challenges obtaining in the country.
The constraints, which are banking sector-wide, will also see the Reserve Bank of Zimbabwe relax capital mobilisation deadlines in the Mid-Term Monetary Policy Statement expected within the next few weeks.
However, in the unprecedented Interfin case, the central bank noted that the curator, Mr Peter Bailey, had made "significant" progress in concluding capitalisation and loan recovery initiatives.
All amounts deposited or invested with the bank will remain frozen during the period of curatorship as the central bank guards Interfin against uncontrolled withdrawal or removal of funds or assets. This is the longest period that a financial institution has remained under curatorship in Zimbabwe.
Contacted for comment yesterday, RBZ Governor Dr Gideon Gono said: "Yes, it (Interfin curatorship) has been extended to take into account developments in the macro-economy that are militating against the injection of new capital prior to the resolution of those macro-economic, social and political imperatives."
He said the issues were beyond the individual, institutional or shareholder capabilities to resolve in the immediate future hence the need for a softer stance.
"Our telescopic view is that a lot of micro issues will be resolved in the medium and not short term due to the multiplicity of far-reaching macro issues that can only be tackled after a range of major events in the immediate horizon, hence the extension."
The economy continues to experience severe liquidity challenges while the impending harmonised elections have seen most potential financiers adopt a wait-and-see attitude.
Interfin was placed under curatorship last June after succumbing to debts of more than US$80 million.
The bank's unsafe and unsound condition was attributed to inadequate capitalisation, concentrated shareholding and high level non-performing insider and related party loans, among other factors that constricted the institution, wholly owned by Interfin Financial Services.
On recapitalisation Dr Gono has assured banks that the central bank is sensitive to the obtaining environment and will make pronouncements to that effect in the Mid-Term Monetary Policy Statement.
Commercial and merchant banks were expected to attain US$50 million capital levels by June 30 and US$75 million by December 31 while the figure for building societies was pegged at US$40 million by June 30. Some institutions have already achieved these levels while others are facing challenges in this regard.
The constraints, which are banking sector-wide, will also see the Reserve Bank of Zimbabwe relax capital mobilisation deadlines in the Mid-Term Monetary Policy Statement expected within the next few weeks.
However, in the unprecedented Interfin case, the central bank noted that the curator, Mr Peter Bailey, had made "significant" progress in concluding capitalisation and loan recovery initiatives.
All amounts deposited or invested with the bank will remain frozen during the period of curatorship as the central bank guards Interfin against uncontrolled withdrawal or removal of funds or assets. This is the longest period that a financial institution has remained under curatorship in Zimbabwe.
Contacted for comment yesterday, RBZ Governor Dr Gideon Gono said: "Yes, it (Interfin curatorship) has been extended to take into account developments in the macro-economy that are militating against the injection of new capital prior to the resolution of those macro-economic, social and political imperatives."
He said the issues were beyond the individual, institutional or shareholder capabilities to resolve in the immediate future hence the need for a softer stance.
"Our telescopic view is that a lot of micro issues will be resolved in the medium and not short term due to the multiplicity of far-reaching macro issues that can only be tackled after a range of major events in the immediate horizon, hence the extension."
The economy continues to experience severe liquidity challenges while the impending harmonised elections have seen most potential financiers adopt a wait-and-see attitude.
Interfin was placed under curatorship last June after succumbing to debts of more than US$80 million.
The bank's unsafe and unsound condition was attributed to inadequate capitalisation, concentrated shareholding and high level non-performing insider and related party loans, among other factors that constricted the institution, wholly owned by Interfin Financial Services.
On recapitalisation Dr Gono has assured banks that the central bank is sensitive to the obtaining environment and will make pronouncements to that effect in the Mid-Term Monetary Policy Statement.
Commercial and merchant banks were expected to attain US$50 million capital levels by June 30 and US$75 million by December 31 while the figure for building societies was pegged at US$40 million by June 30. Some institutions have already achieved these levels while others are facing challenges in this regard.
Source - herald
