Latest News Editor's Choice


News / National

RBZ issues statement on commercial bank loans

by Tarisai Mudahondo
18 Jun 2022 at 06:43hrs | Views
The Reserve Bank of Zimbabwe (RBZ) issued a statement on the outcome of investigation of the abuse of commercial bank loan facilities by certain business entities yesterday.


The press statement reads  that  the  majority of the entities investigated have adopted business models based on arbitrage, whereby they make significant profit margins by borrowing at concessionary terms.

Most entities generate significant revenues in either ZW$ or US$ or both which are sufficient to cater for their working capital requirements.

According to the press statement seen by Bulawayo24.com the bank has put in place corrective measures with effect from 1 July.

The stipulated measures reads that, "No bank shall extend a loan to an entity or individual at an interest rate below the prevailing bank policy rate.

Banks shall implement appropriate due to diligence measures to ensure that borrowing by holding entities on behalf of their subsidiaries are properly justified at the loans are used strictly for the intended purposes".

The statement also highlighted that banks shall ensure effective credit risk management, ensure that borrowings are used for the intended purposes and ensure that compliance with the prescribed prudential lending limits provided under the Banking regulations SI 205 of 2000.

Source - Byo24News