Zimbabwe to Reform Banking Industry
Monday, October 5, 2015
Zimbabwe is finalising new laws aimed at strengthening its fragile banking industry through measures such as imposing shareholding restrictions and revamping oversight functions to guard against insider loans.
Foreign-owned banks in the country – which include the units of Standard Bank, Nedbank, Barclays, Standard Chartered and Ecobank – have remained the most stable ones but the banking groups’ locally owned counterparts face liquidity and corporate governance problems.
The foreign-owned banks enjoy liquidity support from their international parent companies and have also adopted stricter lending criteria to manage risks from loan defaults.
This comes on the back of bank failures in Zimbabwe that have left the sector vulnerable, prompting calls from economists and other experts for mergers and acquisitions in the Zimbabwean financial services sector.
Banks such as Allied Bank, AfrAsia Kingdom, Genesis and Trust have folded in the past three years.
The Zimbabwean government is now moving in to restore corporate governance in the financial services sector and to shore it up through new legislation and enhancing oversight of the industry.
Source: IOL (link opens in a new window)