Banks first deadline lapses

THE deadline for banks to raise $25 million of the new minimum capital requirements lapsed yesterday amid indications that a number of foreign and local banks had managed to raise the requisite funds.

The deadline came amid reports that under-capitalised banks were finalising negotiations with partners to meet the first phase of the minimum equity capital.

Reserve Bank of Zimbabwe governor Gideon Gono in August announced an eight-fold increase in minimum capital requirements to $100 million for commercial banks.

Under the new capitalisation exercise, commercial banks had up to yesterday to raise $25 million.

Recent media reports indicated that CBZ, MBCA , Standard Chartered Bank, BancABC, ZABG, Kingdom, and Stanbic had written to the central bank indicating they had complied, or were in the process of complying.

FBC and BancABC had also indicated they had met the first deadline.

The hiking of the minimum capital requirements sparked fears that the move could result in closures of some locally-owned banks.

The central bank governor announced a phased recapitalisation exercise for the financial services sector which is expected to be concluded by June 2014.

This means that shareholders of commercial banks operating in the country are now expected to raise $100 million as minimum capital.

Shareholders are expected to increase that threshold to 75% by year end before fully complying at the end of June 2014.

Gono also raised the requisite capital for building societies to $80 million from $10 million as well as that for microfinance institutions to $5 million from
$1 million.

The eligible capital components for minimum capital would include paid-up share capital, share premium, audited retained earnings and current year retained earnings verified by the banking institutions' external auditors.

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