BAZ dismisses fears of banking crisis

The local banking industry is slowly emerging from the woods following a period of depressed deposits and lack of confidence. ReNaissance Financial Holdings Limited was involved in abuse of depositors funds. BAZ President, John Mushayavanhu, acknowledged poor corporate governance on the part of Renaissance but said there was no reason for depositors to panic as the incident has no major bearing on the whole industry.
Observers and economic analysts, however, feel there should be a thorough investigation by the Reserve Bank of Zimbabwe into the whole industry as there could be abuse of depositors funds by other players. Between 2003 and 2004, the industry witnessed a wave of such abuse.
The Reserve Bank has placed ReNaissance Merchant Bank (RMB) under curatorship for six months after a high level of non-performing insider and related-party exposures that included a $9,8 million loan to former CEO Patterson Timba, and gross violations of banking laws and regulations. The bank is now technically insolvent, with a negative capital of about $16,7 million as at April 30 and a 38% exposure to insiders.
The central bank has also fired, with immediate effect, the boards of directors of RMB and its parent ReNaissance Financial Holdings Ltd (RFHL) comprising group chairman Lovemore Moyo, CEO Timba, group executive director responsible for business development Dunmore Kundishora, non-executive director Robert Tindwa, and executive director treasury and structured finance Shepherd Shara.
Also ousted are head of internal audit Shepard Muzivi, manager for treasury operations Norest Kwete, group accountant Tatenda Madzingo, and group company secretary, Lydia Timba. The investigations followed a tip off from a whistleblower within the financial group after controversial businessman Jayesh Shah was not repaid money he had lent to Timba.