eBusiness Weekly
Business Writer
Time Bank has been given the green light to resume operations if it meets certain conditions required before re-opening, the Reserve Bank of Zimbabwe has said.
The Reserve Bank and Time Bank of Zimbabwe Limited have historical disputes, which have been the subject of litigation. During this period, Time Bank has not been operating as a banking institution. The central bank said following discussions to address the issues, resolution had been reached to facilitate re-opening of the bank.
“Time bank shall be resuming banking operations subject to prior inspections by the Reserve Bank of Zimbabwe to ensure that Time Bank has put in place the necessary capital and banking systems and structures,” said the central bank in a statement.
The legal battle is premised on the fact that the RBZ placed the bank under curatorship on grounds the commercial bank’s balance sheet had a negative equity of Z$174 billion. Time Bank however argued the central bank owed it Z$400 billion which, if paid, would change its fortunes.
RBZ governor Dr John Mangdya was in 2015 quoted as saying the central bank was in talks with Time Bank over about $15 million which was raided in the commercial banks foreign currency accounts.
This comes after the bank was expected to reopen its doors to the public in 2010 after its shareholders successfully challenged deregistration of the bank after it was put under curatorship. The then Finance Minister Tendai Biti upheld the court decision amid claims the bank would resume operations October of that year. At the time, claims the bank lost $30 million when vital information was stolen while the bank was under curatorship.
Time Bank was among indigenous financial institutions which were shut down by the central bank between 2003 and 2006 on allegations that they had become financially unsound largely resulting from abuse of shareholder deposits by shareholders.
Some of the institutions to be closed at that time included Royal Bank, Barbican and Trust Bank which were later merged into now defunct Zimbabwe Allied Banking Group.
In September 2010, the central bank re-issued commercial banking licences to three banks that had been shut down, but later reversed the decision after the institutions failed to meet a minimum capital requirement of $12,5 million at that time. Another bank which suffered the similar fate later was Renaissance Merchant Bank (RMB). RMB was placed under curatorship in June 2011 after it emerged top shareholders of its holding company borrowed millions of dollars of depositors’ funds in breach of banking regulations.
