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Allied Bank

Business Reporter
THE Reserve Bank of Zimbabwe (RBZ) has cancelled the licence for the troubled Allied Bank Limited saying the institution was no longer safe to serve the public.

In a statement yesterday the Central Bank’s registrar of banks said Allied Bank surrendered its licence as it was grossly undercapitalised.

“Members of the public are advised that on 8 January 2015, the Reserve Bank cancelled Allied Bank Limited’s licence in terms of section 14 (4) of the Banking Act [Chapter 24:20].The cancellation followed a voluntary surrender of the licence by the banking institution,” said RBZ.

“The Reserve Bank has determined that the banking institution is no longer in a safe and sound condition in that the institution is grossly undercapitalised and is facing chronic liquidity challenges.”

The Central Bank said it will accordingly “apply for the liquidation of the institution in terms of section 57(1) (a) of the Banking Act”.

This action was considered to be in the best interests of the banking Institution, its depositors and creditors, and the banking sector in general, said RBZ.

Allied Bank posted a $4,3 million loss for the first half of the year to June last year, a steep rise from $1,6 million loss recorded the same period the previous year as it faced cash flow difficulties and failed to meet its obligations to depositors.

During the period under review the bank’s total assets also went down to $31,6 million from $38,6 million recorded in the previous year.
Its total liabilities went up by 13 percent to $27,7 for the year under review compared to $24,3 million recorded during the same period the previous year.

Meanwhile, the RBZ has applied for the liquidation of Interfin Bank Limited following the expiry of its curatorship period last month.