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Deputy RBZ governor Charity Dhliwayo

THE banking sector will be subjected to an annual assessment of financial position by a ratings company as part of proposed amendments to the banking legislation. The bill has been sent to Parliament and will be debated by lawmakers “in due course,” Charity Dhliwayo, deputy Reserve Bank Governor, said in a written response to questions.

Zimbabwe has 13 operating banks, including local units of Barclays Plc, Standard Chartered Plc and Johannesburg-based Standard Bank Group Ltd. The revised law is intended to stabilise the industry through strengthened corporate governance and improve protection of consumers, Dhliwayo said. The proposals convert to law guidelines for the annual rating of banks that were drafted in 2004.

The central bank will accredit ratings companies to do the annual assessments, which will have to be paid for by the banks that get tested, the draft shows. Other changes to the law would allow for directors and senior staff at banks and controlling companies to be prosecuted for the abuse of depositors funds, according to the Banking Amendment Bill.

If a bank is placed under curatorship or wound up, directors and senior staff can be liable for its debts and the Registrar may take legal action against them on behalf of depositors and creditors who would have suffered loss, the draft legislation shows. Zimbabwe also intends to amend bank ownership rules, limiting individuals to a maximum of 10 percent of the shares in a lender or a controlling company, with corporate bodies restricted to 25 percent, unless the conditions are waived by the Registrar.

“The Registrar’s permission will depend on the public interest, the interest of the banking institution or controlling company, and whether or not the shareholders are fit and proper persons,” according to the draft. — Bloomberg