Vincent Kahiya/Shakeman Mugari
MANAGERIAL malfeasance at Barbican Bank has left the financial institution weighed down by a $23 billion debt, which the central bank is probing.
This week the Zimbabwe Independent learnt that despite claims by the bank, which has now been placed under a curator, that it had repaid $6 billion advanced to it by the Reserve Bank, its balance sheet shows a shortfall of $23,3 billion.
The bank was closed on March 15 and is under the curatorship of Terry Matavire of KPMG. It has been established that central bank investigators are treating problems at the bank as high-level fraud which they believe involves RBZ workers and former staff at Barbican.
A document to hand shows that the bank has had liquidity problems for over six months and was surviving on advances from the central bank which increased in February. The document shows that since December 8 last year, the Reserve Bank advanced close to $60 billion to Barbican despite information that the bank was on the verge of collapse.
Even when it became clear that the under-capitalised bank would not survive, the central bank continued to pour funds into the bank.
The RBZ is said to have started investigations to uncover how the bank managed to receive close to $60 billion in advances. The advances were given when Gideon Gono was already governor of the central bank. They were made in 12 batches with some valued at $10 billion.
A bank receives an advance from central bank when its closing balance is in deficit to the extent that it would not be able to conduct business the following day. Gono under his new monetary policy has said the RBZ would no longer accommodate banks overnight.
The documents also show that at the time of closing the commercial bank owed $23,3 billion to the RBZ. It is not clear whether the central bank would recover the debt which is currently locked into the bank due to the curatorship.
Sources in the banking sector said if Barbican finally sinks into insolvency the central bank is unlikely to recover the outstanding amount. There is also doubt whether the bank has a strong asset base to cover its commitment.
Gono said he was not at liberty to discuss individual banks.
“No we don’t do that. We don’t discuss individual banks,” he said.