Friday, December 10, 2010

(LUSAKATIMES) BOZ takes over Finance Bank, fires directors

BOZ takes over Finance Bank, fires directors
By LusakaTimes
Friday, December 10, 2010, 18:59

Bank of Zambia (BoZ) has taken over operations of embattled Finance Bank Zambia limited. The Central Banks says this is pursuant to the Bankers Act 81. (1) (c) (i) and (ii) of the laws of Zambia meant to protect the institution from further damage created by its shareholders, directors and senior managers.

BoZ says the, directors and shareholders of the bank had failed to comply with the law on good governance and management practices. BoZ says if it did not move in to take control of the institution the bank’s liabilities would have affected other stakeholders in the financial sector.

The Central Bank said it would ensure stability in the banking sector and that operations at Finance Bank would continue to run smoothly without disruptions.

And BoZ has since appointed Leonard Hanze as acting chief executive officer with immediate effect.

This follows the removal of the chief executive officer, managing director, executive director Special Projects, executive director Finance and credits and executive director Corporate Banking and Marketing.

Others relieved of their duties include executive director Treasury and International Banking, Executive director Retail Banking and Operations and Financial Consultant.

Central Bank governor Caleb Fundanga has assured the staff and customers at Finance Bank that the bank would be fully operational on Monday December 13, 2010.

Yesterday BoZ Head of Public Relations Kanguya Mayondi dispelled reports that government through the Central Bank was intending to take over Finance Bank and Nationalise it.

Mr Mayondi said in a statement that it was not the business of BoZ to nationalize banks, stressing that the Bank has no intention of nationalizing any bank in Zambia.

Mr Mayondi said the Bank’s business is to regulate and supervise banks and other financial service providers as outlined in the Banking and Financial Services act Cap 387 of the laws of Zambia

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