The awarding of banking licences to executives who presided over failed financial institutions has raised a stink, with critics saying this exposes the Reserve Bank of Zimbabwe’s hypocrisy.
In some instances, some of the executives have also been appointed directors of financial intuitions despite the law prohibiting them to be involved any running the affairs of financial entities.
Former AfrAsia Holdings managing director Lynn Mukonoweshuro was recently given a banking licence- which saw the formation of a deposit-taking micro-finance institution, Lion Finance. The financial institution is funding small farmers among other businesses.
Poor corporate governance was blamed for the collapse of many banking institutions.
About 20 banking institutions closed since 2000 and notable casualties include Trust Bank, Genesis, Royal, Barbican, Renaissance, CFX and Time bank. Market analysts argue the issuance of banking licences raises hypocrisy of some officials at the central bank.
The market is worried about how the banking sector affairs are being handled considering that former Kingdom managing director was recently awarded a licence yet she was the person running Kingdom AfrAsia Holdings which owned Kingdom Bank.
“The RBZ should provide clarity as to how they reached a position to award a banking licence to a director of a failed bank. There is suspected underhand dealing among RBZ officials,” said a market analyst who requested anonymity.
Deposit Protection Corporation chief executive John Chikura said the law was clear on the proposed treatment of failed bank executives whenever they are looking at opening new institutions.
“The law is clear especially in the amendment to the Banking Act It is the responsibility of RBZ as to how they are going to implement the law,” said Chikura.