RMB was placed under curatorship on June 2 by the Reserve Bank after allegations that its directors and shareholders misappropriated depositors' funds. The central bank had said it would be closed for two weeks.
Reggie Saruchera, the curator told The Zimbabwean on Monday that the move was "in the best interests of the bank, its depositors, creditors and the banking system."
The abuse of depositors’ funds included a high level of non-performing insider and related-party exposures that included a $9,8 million loan to former CEO, Patterson Timba and violations of banking laws and regulations by Timba and the CEO, Dunmore Kundishora.
RBZ Governor Gideon Gono indicated that, given its capital deficit, Renaissance Bank requires $32 million to comply with regulatory capital requirements.
The report highlights an inappropriate shareholding structure in which Timba and Kundishora own 68.9 percent of the RMB group, in breach of banking laws; gross undercapitalisation – the bank is technically insolvent, with a negative capital base of $16.7mmillion instead of the stipulated $10million for merchant banks and requires an additional $55.1million to meet regulatory capital requirements; the violation of banking regulations, in particular section 16 (2)(b) of the Banking Regulations Act.
Post published in: Business Analysis