Maravi

(NEWZIMBABWE) Gono rules out Stanchart closure
09/04/2013 00:00:00
by Gilbert Nyambabvu

COMMENT - Gideon Gono, defender of Standard Chartered Bank.

RESERVE Bank of Zimbabwe (RBZ) governor Gideon Gono has warned the National Indigenisation and Economic Empowerment Board (NIEEB) against causing havoc in the banking sector and insisted that the British-owned Standard Chartered bank would not be closed.

The NIEEB warned the transacting public Last weekend against doing business with Stanchart – one of the country’s largest banks – saying the institution would be shut down for failing to comply with the country’s indigenisation programme.

“Persons, businesses and Government Departments dealing with these companies are by this statement given notice of the intention of Government to shut down these businesses until such time that they comply with the law,” the board was reported as saying.
But in a statement Tuesday, Gono said the threat had resulted in depositors rushing to withdraw their money from the bank.

“There are signs of instability and anxiety among stakeholders especially depositors who do business with Standard Chartered Bank Zimbabwe Limited,” said the RBZ chief.

“The instability is manifesting itself in the form of clients wanting to withdraw all their deposits from the Bank for fear that they will lose their hard-earned savings should the Bank be closed as has been threatened by the National Indigenization and Economic Empowerment Board officials at the week-end.”

He said threats directed at Stanchart could have wider consequences for the country’s fragile banking sector and the rest of the economy.

“Destabilising a large bank such as Standard Chartered has serious systemic consequences that can lead to unintended results which are opposite to those that we would have hoped to achieve,” he said.

“Standard Chartered Bank clients are advised to go about their business in a sober and normal manner because nothing of the sort which was announced by NIEEB officials is of any legal or practical effect.”

Foreign companies are now required by law to transfer at least 51 percent of their Zimbabwe operations to locals and the Empowerment Ministry has accused Stanchart of failing to comply with the legislation.

Empowerment Minister Saviour Kasukuwere said most of the other foreign banks – UK-based Barclays and the local units of South Africa’s Standard bank and the Nedbank group – had moved to comply with the requirement.

Gono however, assured depositors that Standard Chartered would not lose its operating licence over the issue.

He said: “All stakeholders of the bank and indeed, of other Banks are hereby advised not to panic or wantonly withdraw their funds from the Bank as the Central Bank which is the sole authority which issues and withdraws banking licenses from players in the Zimbabwean financial sector has not signaled any move in the direction intimated by NIEEB nor in any other way suggesting that Standard Chartered Bank will lose its business license for any reason in the near future.”

Gono and Kasukuwere have publicly bickered over indigenisation of the country’s banking sector with the RBZ chief counseling caution and warning against a “one-size-fits-all’ approach to enforcing compliance in the sector.

Kasukuwere has said foreign banks not willing to comply with the law are welcome to leave the country.
But Gono said indigenisation of the banking sector was still “work in progress”.

“We (RBZ) are for the orderly implementation of the Indigenization and Empowerment program as spelt out in the Empowerment and Indigenization Act Chapter 14:33 and the Regulations thereof, bearing in mind though that in implementing this law due regard and observation must be made of other pieces of legislation on our books which serve to complement or counter balance each other such as The Exchange Control Act and Regulations and The Reserve Bank Act Chapter (among others),” he said.

“The template of Zimbabwe’s indigenization and empowerment program is for all Zimbabweans to contribute towards its fulfillment in the best interests of the broad masses of identifiable beneficiaries and we believe that in the Banking Sector, it is still work-in-progress and no one should take precipitous positions that are to the detriment of the sector as a whole.”

Labels: GIDEON GONO, NEOCOLONIALISM, NIEEB, SAVIOUR KASUKUWERE, STANCHART

posted by MrK @ 5:08 PM