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industry, the Bankers’ Association of Zimbabwe has said.
In an interview, BAZ president Mr John Mushayavanhu,urged the public not to panic as the situation was “under control”.

“The banking sector is not under fire,” he said. “There may have been a corporate governance breakdown at Renaissance but that does not mean that the rest of the banking sector is under pressure.
“Our regulator (the Reserve Bank of Zimbabwe) is also quite active in ensuring stability in the country’s banking system despite operating with little resources.”

Mr Mushayavanhu, the CEO of FBC Holdings, said there was no exposure between banks since little interbank transactions took place.
Investigations by the RBZ unearthed a “total collapse” of corporate governance structures at Renaissance Financial Holdings Ltd, which wholly owns RMB.

The bank has been placed under curatorship for the next six months.
It transpired that RHHL directors directed the day-to-day operations of RMB, including the processing of payments without the necessary approval.

The investigation noted the abuse of depositors’ funds by the major shareholder, Mr Patterson Timba. This was done through debiting unfunded RFHL call accounts held by RMB, which had an unauthorised overdrawn balance of US$9,8 million as at April 21, 2010.

According to the RBZ report, the “siphoning” of funds through related party loans and shareholders and their associates “was akin to a declaration of dividends by the shareholder from the depositors’ funds”.
Mr Mushayavanhu urged banks to be guided by sound corporate governance to avoid a situation similar to that at Renaissance Bank.

RBZ Governor Dr Gideon Gono said recently that the central bank was prepared to ensure that stability continues to prevail in the market. He warned banks against “indulgence in fraudulent and other undesirable activities bent on abusing funds for selfish motives”.

“We stand ready to conduct incisive examinations or investigations on every banking institution that is not compliant with the banking laws and regulations,” he said.
“As supervisory authorities, we will not hesitate to institute appropriate measures or actions, including closure of errant banking institutions, to protect he integrity of the financial system.”