HARARE A number of Zimbabwean financial institutions have missed a 31 December 2010 deadline to meet minimum capital thresholds set by the central bank, The Zimbabwean On Sunday learnt last week. (Pictured: Gideon Gono - Expected to announce the outcome of the financial sector
Reserve Bank of Zimbabwe (RBZ) sources said only 20 of the countrys 24 financial institutions were in compliance with the prescribed minimum paid-up capital requirements as of the end of last year. A number are still under-capitalised and may be forced to close or seek strategic partners if they are to remain operational, said a central bank source who spoke on condition of anonymity.
He refused to disclose which institutions were under stress. RBZ governor Gideon Gono is expected to announce the outcome of the financial sector recapitalisation programme when he presents his 2011 monetary policy statement later this month or in February. The RBZ requires commercial banks to have a minimum capital threshold of US$12.5 million.
The failure by the financial institutions to meet the new RBZ capitalisation requirements rekindles debate as whether or not the
country is over-banked. Analysts say that with its small population, Zimbabwe only requires a minimum of five and a maximum of 10 banks. The country currently has more than 40 financial institutions that are scrambling for a shrinking cake.Consultant economist John Robertson said mergers would be the way to go for the financial sector.
The hopes are that several mergers will bring the total number to a figure more in line with the size of the Zimbabwe economy, but growth rates for this sector are expected to remain modest in the immediate future, he said.
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