BOZ advert on bank charges
By Eustace Chamulonde
Thu 01 Sep. 2011, 12:00 CAT
Editor,
It seems there is a problem of institutions being out of touch with reality in our country right now. For I do not see how the Bank of Zambia (BOZ) can proudly publish an advertisment in the national dailies outlining bank charges on various services offered by commercial banks which is very far from what is obtaining on the ground.
If you ask anyone in Zambia accessing banking services, they will allude to the various many hidden costs that banks will sneak into one's account without warning or consultation.
Some of the common ones but not the exhaustive list being; a charge on drawing above a certain amount from one's account, or being charged for conducting above a certain number of withdrawals from one's account.
Surely, if I may ask, do we not keep money in the bank for security reasons and to be able to access it at our convenience?
If the logical answer to that is yes, why then should the banks limit one's access to their money in terms of amount and times they have to withdraw it from the bank.
I urge BOZ staff in charge of commercial banks supervision to go out and get the real charges banks are subjecting us to and not issue advertisements that are out of touch with reality.
Or could it be that they are so comfortable salary wise that a charge of K140,000 lumped to their statements in retrospective charges does not mean anything to them?
Labels: BANK OF ZAMBIA, BANKING
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Central bank recommends agriculture-driven growth
By Edwin Mbulo in Livingstone
Fri 02 Sep. 2011, 13:40 CAT
AGRICULTURE-RELATED growth is twice as effective in reducing poverty as growth based on other sectors of the economy, says Bank of Zambia deputy governor for Operations Dr Austin Mwape.
Officiating at the African Rural and Agricultural Credit Association (AFRACA) Southern African sub-regional (SACRAT) workshop on Wednesday, Dr Mwape said it had been further documented that agriculture was a proven driver of poverty reduction.
"When agriculture stimulates growth in Africa, the growth is twice as effective in reducing poverty as growth based on other sectors of the economy. In this regard, agriculture provides the largest source of employment in many countries and will remain the lead sector of comparative advantage," Dr Mwape said.
He said the recent global financial and food crises have led to renewed focus on agriculture and agri-business as priority sectors for spurring economic growth in Africa.
"For this to be effective, there is need to develop value chains that integrate producers and markets to make the agriculture sector more responsive to consumer demand," he said.
"The value chain approach should be aimed at building on conditions in the consumer market and emphasise the linkages and segments that connect the final product demanded by consumers all the way to the agricultural commodities produced at farm level."
Dr Mwape said the key segments in the value chain were the consumer market, trade logistics, packaging, postharvest risk management and agricultural production.
And Swaziland deputy bank governor Phil Mnisi said his entourage decided to attend the workshop with a view to joining AFRACA, adding that agriculture stimulates growth at grassroots levels.
Labels: AGRICULTURE, BANK OF ZAMBIA
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Competition in banking sector still low - BoZ
By Kabanda Chulu in Kitwe
Sun 03 July 2011, 20:50 CAT
THE banking sector has remained fragmented with insufficient and distorted competition resulting in rigidity of its activities, says Bank of Zambia governor Caleb Fundanga.
And Dr Fundanga has expressed concern that
the increase in financial institutions has not had a significant impact on promoting competition since most of the banks are too small.
During a business symposium for SMEs at the ongoing Zambia International Trade Fair, Dr Fundanga said competition was not strong enough to lead to a convergence of prices that would ensure that banks have more or less the same prices for their services and products affordable to most people.
“This can also explain why finance service providers are not revising their interest rates and charges in tandem with the movements in key macroeconomic indicators such as inflation,” Dr Fundanga said.
“Whereas BoZ is conscious to the fact that the financial institutions are in business and are therefore expected to make profits but there is need to make financial services more affordable in order to promote economic growth and reduce poverty levels in the country since low interest rates reduce the cost of doing business and encourage investments in key sectors of the economy.”
He said BoZ had recognised that competition was an essential element in the effective and efficient operation of a market economy.
“In this regard, the licensing regime encourages entry of players that will foster integrity, innovation and competition while deepening and widening the financial sector and we have a huge list of new applicants wishing to invest and open new banks in Zambia,” Dr Fundanga said.
“The presence of reputable financial intermediaries is expected to increase competition which in turn will lead to an improvement in the quality of domestic financial services and allocate efficiency of financial intermediation will eventually be translated into higher returns for domestic savings and greater efficiency in the pricing of credit and other risks and in the allocation of credit.”
Nevertheless, Dr Fundanga said the growth in the number of financial institutions has not had a significant impact on promoting competition since most banks are small.
“A few banks continue to enjoy an oligopolistic position and this in a way explains why some inefficiency remains in the provision of services,” said Dr Fundanga.
Labels: BANK OF ZAMBIA, CALEB FUNDANGA, COMPETITION, LENDING RATES
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Bank of Zambia seeks autonomy
By Ndinawe Simpelwe in Solwezi
Tue 28 June 2011, 09:10 CAT
THE Bank of Zambia has submitted a proposal to the government to make the institution independent from the executive. Bank of Zambia (BoZ) secretary Mathew Chisunka said the proposed Act would have the responsibility of all monetary policy.
Chisunka said independence of the central bank would ensure maintenance of a sound banking system and efficient payment system in the country.
“The Act will make the Bank of Zambia conform to the standards of central banks in the SADC region as most of them are independent,” said Chisunka during a seminar organised for journalists by the central bank recently.
He said some salient elements of the proposed BoZ Act would include provisions relating to adequate power and independence.
“We hope to see the central bank have adequate mechanisms for good governance, accountability to government, Parliament and the public,” he said.
He said the proposed Act included the security of tenure for the governor and the two deputies.
Chisunka said BoZ had proposed that the appointment of the bank's governor be approved by Parliament.
“We want a situation where appointment of the BoZ governor will not rest in the powers of the President alone. We want the President to propose a name that has to be approved by Parliament,” Chisunka said.
He said it would be important to have the Act in place as it would have clear functions and powers with clear limitations.
Chisunka also said the proposed Act would help the country prepare for the proposed central bank for the region.
He said SADC was supposed to have one central bank by the year 2018 and Zambia needed to prepare for it.
He said the independence of the central bank would improve the governance of the institution.
He said good governance of the central bank was important because there were a number of scandals related to poor governance and corporate failures.
He said at the heart of scandals and corporate failures were effectiveness of the boards, directors' remuneration, financial reporting, risk assessment and management processes.
Chisunka said others included accountability of accountants, white collar crime and effectiveness of audits.
Labels: BANK OF ZAMBIA, SEPARATION OF POWERS
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Local FBZ shareholders challenge takeover of their bank
By The Post
Thu 19 May 2011, 04:01 CAT
Zambian shareholders of Finance Bank are seeking to restrain First Rand Merchant Bank which trades locally as First National Bank - Zambia from taking over Finance Bank.Following Bank of Zambia’s forcibly takeover of Finance Bank last December on account of the shareholders abrogating Banking and Services laws, managers from First Rand National Bank had been running the bank.
The indigenous shareholders of Finance Bank, Finsbury Investments Limited, Clarkwell Limited, Job Albert Samuel and Chewe Puta the administrator of the estate of Pat Bwalya Puta are contesting that BoZ should not sell or enter into agreement over Finance Bank until the matters before the courts of law in Zambia are disposed off.
First Rand Merchant Bank is expected to take-over operations of Finance Bank, in a deal that was expected to be concluded before the next presidential and general elections largely expected this September.
Lawyers for the minority shareholders, Simenza and Sangwa advocates served the service of petition on First Rand Merchant Bank on May 10, 2011 with the help of Carl Ellis Boden of JJS Manton Attorney of Johannesburg.
The affidavit of service is in respect of the petitioners request that the High Court of Ndola grant them an interim relief in the form of an injunction, until after determination of their human rights and that during the period, both BoZ and First Rand Limited whether themselves, their officers, servants or agents from interfering with or dealing with any manner whatsoever with the Petitioners’ share in Finance Bank Zambia Limited.
The petitioners were also seeking the court’s authority to prevent BoZ or BoZ and First Rand Limited whether themselves, their officers, servants or agents from selling Finance Bank Zambia Limited whether as a going concern or its assets.
Labels: BANK OF ZAMBIA, CORRUPTION, FINANCE BANK
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Credit Suisse considers legal action against BoZ
By Chiwoyu Sinyangwe
Tue 15 Mar. 2011, 04:00 CAT
SWISS financial giant Credit Suisse has told BoZ that it might use legal means to prevent its 40 per cent equity from being absorbed in the plans to sell Finance Bank away from its shareholders. And Finance Bank's value has plummeted from US $200 million in 2008 to mere pittance, Bank of Zambia (BoZ) told Credit Suisse.
According to sources within BoZ, Credit Suisse officials Christopher Corson and Markus Niemeier told the Central Bank that
allegations of insider lending advanced for the alleged forcible takeover of Finance Bank were not beyond the capacity of the international financial institution to handle.
Credit Suisse, in 2008, bought a 40 per cent stake in Finance Bank in a strategic decision in which the Swiss bank was supposed to lead future expansion programmes for Finance Bank, which included opening branches in Zimbabwe and the Democratic Republic of Congo.
Credit Suisse said they would do everything within their means to ensure their stake in Finance Bank was not absorbed or diluted in the sale of the bank in a Purchase and Assumption Transaction in which South Africa's First Rand Merchant Bank is the favoured buyer.
“They told Bank of Zambia that they will do everything to protect their interest in Finance Bank from being absorbed,” the sources said.
“They don't agree with the roadmap taken by the Bank of Zambia to sell Finance Bank, and that if worst comes to worst, they will use both local and international legal means to stop the transaction.”
Credit Suisse lawyers in London, D.L Piper, have since appointed Chibesakunda & Co to represent it in protecting its stake in Finance Bank.
“They basically told the Bank of Zambia that the management problems they advanced for the takeover of Finance Bank did not warrant the move,” the sources said.
“And they also contended that since they Credit Suisse own 40 per cent in Finance Bank, at least, they should have been informed of the move to take over the bank. And besides, they said they have the capacity to institute the changes at management to correct whatever wrongs were allegedly happening at the bank and to meet any capital adequacy requirements”
In response, BoZ told the two officials that Credit Suisse should put its concerns in writing and address them to the director of bank supervision by March 17, 2011 at 17: 00 hours.
And sources said Credit Suisse officials were surprised when BoZ told them the value of Finance Bank, which had been declared “solvent,” had plummeted from US $200 million to a mere pittance.
“They were surprised when BoZ informed about the current value of Finance because that drop in value is so huge, and they were wondering on what basis Bank of Zambia arrived at when stating the net value of the bank,” said the sources.
The duo has since flown back to Europe.
As part of the strategic role, Finance Bank was also expected to spearhead the dual listing of Finance Bank both on the Lusaka Stock Exchange and Johannesburg Stock Exchange.
Finance Bank also intended to raise K500 billion in a bond issue which was expected to be done before listing on the Lusaka bourse.
The sources said First Rand Merchant Bank which trades locally as First National Bank (FNB) was scheduled to take over Finance Bank once the process of its sale was completed.
Last December, BoZ single-sourced managers from First Rand Merchant Bank of South Africa to manage the 39 branches of Finance Bank in the country and its workers, circa 1,000.Labels: BANK OF ZAMBIA, CORRUPTION, CREDIT SUISSE, FINANCE BANK
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Banks’ inertia delays CRB
By NKOLE CHITALA
SOME Commercial banks have delayed to provide full information to the Credit Reference Bureau (CRB) with only four being able to use the system out of the ten banks and one leasing company that have been connected to the system. Bank of Zambia Governor, Caleb Fundanga, said the remaining three banks were expected to be connected soon.
Dr Fundanga said out of the 10 banks, which have been connected, only four could actually use the system, as they were the only ones that had paid since the system operates on a prepaid basis.
He was speaking at a quarterly media briefing in Lusaka on Monday.
He said out of the 13 commercial banks in operation, nine have provided Credit Reference Bureau Africa Limited (CRBAL) with data and at least one bank was expected to provide information shortly.
Five of the banks where installation had been done have not made any payment despite installation and training completed in early February, this year.
CRBAL installed software at 11 commercial banks and one leasing company and trained staff at the banks in readiness to use the system. The BoZ has expressed concern over the delays in having the C RB fully functional. Dr Fundanga said the usage of the CRB had been low due to some banks failure to provide data to the CRB.
“The whole concept is diminished if banks are not prepared to provide or are selective in providing data. To this effect we have requested all commercial banks to submit both positive and negative data to the CRB without subjecting the data to any screening or selection,” he said.
Labels: BANK OF ZAMBIA, CALEB FUNDANGA, CRB, CRBAL
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