HARARE - The Reserve Bank of Zimbabwe (RBZ) has extended the banks’ capitalisation deadline to December 31, 2020.
Presenting her maiden Monetary Policy Statement yesterday, acting central bank governor Charity Dhliwayo said the move had been necessitated by the prevailing liquidity challenges in the economy.
“Against the background of attendant challenges in the macro-economic environment and in conformity to (Finance) minister’s pronouncement in the 2014 National Budget Statement to maintain the current levels of banks’ capitalisation... capital levels will remain as per the thresholds obtaining in December 2012,” she said.
In effect, minimum capital levels will be $25 million for commercial banks, $25 million for merchant banks, $20 million for building societies, $15 million for Discount and finance houses and $5 million for micro-finance banks.
The extension — hinted before by former RBZ governor Gideon Gono — is a major relief for banks, particularly indigenous, that were struggling to raise capital.
In July 2012, Gono raised the minimum capital threshold requirements for commercial and merchant banks to $100 million from $12,5 million and $10 million, respectively — to be implemented in a phased manner.
The institutions were ordered to raise $25 million by December 2012 and reach the minimum $100 million by June this year.
Dhliwayo, however, noted that all banking institutions were required to submit comprehensive recapitalisation proposals to the central bank, detailing their plans on meeting the 2020 deadline.
“As such, the Reserve Bank will monitor and evaluate progress made by banks towards attainment of capital milestones as outlined in their respective recapitalisation plans,” she said, adding the apex bank was aiming at minimising systemic risks in the fragile financial services sector, following collapse of numerous banks.
Dhliwayo also reaffirmed the continued use of the multi-currency system and said the monetary authorities had no plans of re-introducing the local currency.