Maravi

(HERALD) Gono slams banks

Gono slams banks
By Walter Muchinguri and Edward Mukaro

RESERVE Bank of Zimbabwe Governor Dr Gideon Gono has slammed some banks for allegedly holding onto millions of United States dollars instead of lending the money out to credible businesses.

Dr Gono said by the end of May some banks were sitting on US$600 million in deposits and that some banks with as much as US$190 million had only lent out US$2 million.

The governor was speaking during a ceremony organised by the Minister of Mines and Mining Development to unveil 50kg of gold that had been acquired by Zimbabwe Gold Miners and Millers Association to Prime Minister Morgan Tsvangirai, his two deputies and several Government ministers.

The gold was acquired in just four days using US$500 000 made available by TN Bank.

The bank has since extended another US$500 000 to the association after it exhausted the initial allocation.

Dr Gono said the issue of banks refusing to lend out money was of major concern during his weekly meetings with Finance Minister Tendai Biti.

He said while he was under pressure to crack the whip on such banks, he believed that the errant banks should carry out self-introspection to assess their relevance in the national economic matrix.

"These banks need to look at themselves and see whether they are still relevant in the economy.

"We do not want to direct banks on what to do with their funds because we want banks to be free to utilise their funds the way they see fit," he said.

He commended TN financial services and POSB for having responded to the call by gold miners for funds to purchase gold.

"POSB is one of the smallest banks in the country while TN Bank is the last born in terms of our banks because it has been less than a year since we issued them with a licence but they are leading in this initiative yet there are some banks that have been operating in the country for more than a 100 years that are still to come to the table," said Dr Gono.

He said the continued inflows of gold could be used to help re-introduce the Zimbabwe dollar in that its value and the printing of the currency would be pegged against the amount of gold the country has in its vaults.

He said the use of gold coins and gold bullion as an asset of value was already in the Banking Act.

Speaking at the same occasion, Prime Minister Morgan Tsvangirai said there was need for banks to take risks when they spot opportunities.

"As politicians we take political risks and likewise bankers should also take business risks. Vasingadi vanoda kugara mucomfort zone vasiyeyi vakadaro haimirire ivete," he said. (Let those that want to remain in their comfort zones do so because time does not wait for anyone).

He said there was need for Government as the principal to ensure the success of the empowerment process by enacting policies and laws that enable Zimbabweans to explore their full potential.

The way Government handles policies, he said, had the power to empower or dis-empower people.

PM Tsvangirai said the reason why the African continent had remained poor despite countries having been independent for more than 50 years, was because there had been too much concentration on political issues as opposed to economic independence.

Deputy Prime Minister Arthur Mutambara called for a paradigm shift in the banking requirements pertaining to loan applications.

He said the current requirements discriminated against people at the bottom end of the pyramid who had potential but did not have registered assets that could be used as collateral.

"For instance a woman works for 20 hours and you investigate and establish that they work for 20 hours, why can you not give that person a loan against that commitment," he said.

The Mines and Mining Development Minister Obert Mpofu commended TN Financial Services and POSB for their support adding that as a ministry they were working round the clock to engage other line ministries on issues that impact on small-scale mining.

He said Government had already engaged the co-Ministers of Home Affairs and the Minister of Environment and Natural Resources Management to ensure that miners are not harassed by police and also that agencies such as the Environmental Management Agency are lenient in their discharge of their duty.

The Minister of Youth Development, Indigenisation and Empowerment, Saviour Kasukuwere said the occasion marked a giant step in the empowerment of the masses.

He said there was need to work around issues that affect the masses and ensure that they are properly empowered including ensuring that they also get facilities such as credit cards and medical aid facilities.

Meanwhile, POSB yesterday extended a loan of R5 million to ZIGMMA for gold purchases.

Speaking during the occasion Minister Mpofu said POSB’s would benefit the economy in that much of the gold that was once being trafficked to other destinations would be sold locally.

"These funds will help ZIGMMA to purchase the gold that is in abundance especially amongst small-scale miners.

"A lot of our gold has been benefiting other countries mainly as a result of trafficking and therefore the move by Government to liberalise the purchasing of gold could witness the total turn around of the economy," he said.

Labels: BANKING, GIDEON GONO, GOLD MINES, NEOCOLONIALISM, TN BANK

posted by MrK @ 7:16 PM