Maravi

Treat all borrowers equally, Sampa tells DBZ

Treat all borrowers equally, Sampa tells DBZ
By Gift Chanda
Wed 06 June 2012, 13:24 CAT

THE Development Bank of Zambia should treat all borrowers equally, says finance deputy minister Miles Sampa. And Sampa has given the board at DBZ two weeks to find a new managing director to run the bank.

During a familiarisation tour of the bank yesterday, Sampa called for professionalism in the operations of the bank. He said all borrowers, in spite of where they were coming from, should be subjected to the same rules.

"Don't have rules for Mr X and rules for Mr Y; treat all Zambians equally. If 15 years ago a company defaulted, you had your ways of recovering that money, probably you liquidated that company and sold the assets finish; that ended the story," he said.

He said the bank should not be in the "front line of breaking company rules or guidelines of lending."

"If any one of the company owners that defaulted 15 years ago, had signed a personal guarantee for the directors, go back and have those directors taken to court so that you recover the money because they signed a personal guarantee. But if they didn't sign a personal guarantee, please the law does not allow you; don't pursue them," Sampa said.

"Don't create different laws for DBZ."

He urged the bank to ensure that it exercises due diligence before a company borrowed to avoid pointing fingers on other people in an event that the borrower failed to repay the loan.

"If the borrower deserves to be punished by the law and by the term sheet they signed here, pursue it that way. Don't create term sheets in the mind…make sure when you give these loans you take responsibility. Make sure before you give the money out be confident; believe in that particular project. That way, if that project fails; the only people to blame are yourselves. Don't blame government, don't blame politicians; don't blame the borrower. The borrower is coming to get money and they will present the project to the best of their ability and it's up to you to do your due diligence," he explained.

He blamed the past management and board for all the loans that had not been repaid in the last 15 years.

"For the new board, if you find some people gave out non-performing loans discipline them. That is what happens in the commercial world," Sampa said.
He also urged the new management to ensure that politics were kept away from the bank.

"In the name DBZ, I haven't seen anywhere it says politicians or politics, so keep politicians away from here," he said.

"Don't be used by politicians. When you make a bad loan, don't come and say this politician told us to do it…the PF will not tell you what to do or whom to lend to. If we tell you whom to lend to please refuse because if that loan goes bad, it will not be politicians; it will be yourselves to be answerable."

Sampa said the board and management should ensure it takes control of the operations of the bank.

"Get away from the habit of saying, 'it was that minister who told us'. We will tell you, tell us where that minister signed. And we politicians don't sign anywhere," he said.

Meanwhile, Sampa told the DBZ board to quickly find a new managing director to build confidence in the bank.

"I am aware you are trying to find a new MD but please do that with the speed that it deserves. Within the next two weeks, give us a new managing director," he said.

"As government, we do not care who you choose but choose someone professionally."

He also urged both the management and the board to ensure discipline is instilled at the bank.

Sampa noted that DBZ was the only bank in the country notoriously known for leaking internal information to the public.

"It DBZ is the only bank in the country where we have seen grave levels of indiscipline and this is because you have members of staff leaking information out of here. We see it in tabloids and we could even see that certain letters were pulled out from your own files because we could see the holes punched in them," he said.

"We don't want to know your internal correspondence…we want to hear about you when you are issuing a press statement or when you have your financials released. If there is any staff that is found wanting, please discipline them because only when you have discipline in your institution will you create confidence and able to attract funds which in turn you will lend out to the Zambians."

DBZ acting director Darwin Shinde said the bank needed fresh capital injection.
He said since the bank was restructured in 2001, capital going to the bank had been reducing and the bank had not been active in the market.

"Given that background, it is important that the government quickly recapitalises the bank and thereby creates a platform to help the country move forward," he said.

Labels: BANKING, DBZ, MILES SAMPA

posted by MrK @ 2:50 PM