(NEWZIMBABWE) Gono blasts foreign banks

Gono blasts foreign banks
by Gilbert Nyambabvu
29/01/2011 00:00:00

CENTRAL Bank Govenor Dr Gideon Gono has threatened to deal “decisively” with foreign-owned banks he accuses of refusing funding to Zimbabwean companies in support of Western sanctions against the country.

The major foreign banks operating in Zimbabwe include the British-domiciled Barclays and Standard Chartered banks as well as Stanbic, which is run by the South Africa-based Standard Bank.

In a monetary statement posted on the RBZ website, Gono claimed that some of these banks were refusing lending to local companies under instructions from their foreign owners.

“This attitude has been explicitly exhibited through the extension of the illegal international sanctions on Zimbabwe by these banks, taking instructions from their international parentages.

“Under these misguided practices, some internationally owned domestic banks are deliberately declining loans to Zimbabwean companies and individuals appearing on the illegal EU/USA sanctions lists,” Gono said.

The RBZ chief also said the banks were paralysing economic activity by holding onto huge deposits instead of extending loans to the country’s productive sectors.

Figures released by the RBZ showed that deposits at Barclays totaled US$173 million by December 2010 and the bank advanced some US$44 million, about 25 percent, in loans and overdrafts.

Elsewhere, Stanchart's loan-to-deposit ratio was about 51 percent while Stanbic’s loans averaged 34 percent of the bank’s US$297 million deposit pile.

Gono threatened to clamp down on the practice which he said harmed country’s economic recovery.

“The Reserve Bank will ensure that these retrogressive attitudes and practices are decisively dealt with in the interest of laying a solid foundation for sustainable financial intermediation in the economy,” he said.

The RBZ chief added that ongoing efforts to realise full economic recovery would come to naught unless sanctions imposed by the West were removed.

“Zimbabwe’s full recovery and return to the path of lasting prosperity continues to be heavily constrained by the debilitating effects of the illegal sanctions being imposed on the country.

“The Reserve Bank continues to urge those responsible for the imposition of the sanctions to please free us from this unjust handicap which is negatively affecting not just the alleged targeted few, but the majority of vulnerable Zimbabweans,” Gono said.