Maravi

Fundanga cautions banks against flouting regulations

Fundanga cautions banks against flouting regulations
By Florence Bupe
Wednesday September 26, 2007 [04:00]

BANK of Zambia governor Dr Caleb Fundanga has cautioned banks against flouting banking regulations. And Standard Chartered Bank chairperson George Sokota has reiterated the bank’s commitment to increasing the loan portfolio to Zambia’s private sector. Speaking at the official opening of the Standard Chartered Bank Crossroads branch yesterday, Dr Fundanga said it was vital for banks in the country to abide by banking stipulations in order to ensure the safety of customers’ deposits according to the financial services Act of 1994.

Dr Fundanga warned that banks that would not comply with the law risked possible sanctions from the Central Bank.

“I must hasten to mention that banks must always comply with regulations as stipulated in the banking and financial services Act to ensure the safety of customers’ deposits and stability in the financial sector.

Any activities by banks which do not meet the minimum standards provided for in the law will invite close scrutiny and possible sanctions from the Bank of Zambia to bring the banks in line with the legal framework,” he said.

Dr Fundanga urged banks to take a lead in implementing actions that would contribute to the development of the financial infrastructure and support the development of Zambia’s economy.

He noted that the cost of borrowing had remained high despite the positive strides attained in the country’s economy.

“The cost of borrowing has remained high despite the progress that has been made in the monetary and fiscal management of our economy.

This high cost has in turn stifled the growth of the productive private sector, in particular the Small and Medium Enterprises (SME) sector, which should be the engine of economic growth of our country,” he said.

Dr Fundanga called on the banking sector to increase their lending capacity to the SMEs in the country.

And Sokota has disclosed that Standard Chartered Bank has recorded significant growth in its lending portfolio of K143 billion.

“We are extending substantial new loans to Zambians in the private sector and we will continue to invest in our business. Standard Chartered Bank is also eager to attract new deposits to avail even more loans,” said Sokota.

Labels: BANKING, BOZ, CALEB FUNDANGA

posted by MrK @ 3:52 AM