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25 more apply for banking licences

Godfrey Marawanyika

THE Reserve Bank of Zimbabwe (RBZ) has so far received 25 applications for banking licences but the central bank is still assessing them.

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During a meeting with the Institute of Chartered Accountants of Zimbabwe on Tuesday governor Gideon Gono revealed the number of applications but said he had the last word on who would receive a licence.

He spoke out against financial institutions that had decided to venture into non-banking activities.

“There is empirical evidence between the breadth and the depth. In other words there is a difference between the first world and ours,” Gono said.

“I do not believe we have the luxury of having destructive players who go outside their core business. Unlike Switzerland where you have a bank on almost every corner this is not the case here. We had 25 applications for possible bank licences but I have told them that I will be the gate-keeper of that.”

The banking sector has been rocked by serious liquidity problems resulting in the RBZ introducing stringent measures within the financial sector.

The sector had been used to chalking up billion-dollar profits despite Zimbabwe’s poor macro-economic fundamentals and shrinking economy.

So far the central bank has bailed out two banks with liquidity support.

Gono said this was necessary to save depositors’ hard-earned money.

He said the central bank would continue with its “quiet diplomacy” of not disclosing which banks were in trouble.

“There is need to consolidate what we already have. I will cut the size of our court…if I allow 25 applications I will be guilty. I do not think we can afford any other player,” Gono said.

“There is no governor in the world who would want to see a bank close, and neither will we disclose the names of the banks in trouble.”

He said bankers should observe the country’s regulations as spelt out by the central bank.

Gono said failure to do this would result in severe punishment.

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