Five com­mer­cial Banks grap­ple with credit im­pair­ments - Deputy BOZ Gov­er­nor

Zambian Business Times - - FRONT PAGE -

The Bank of Zam­bia says at least five lo­cal com­mer­cial banks have 50% non-per­form­ing loan port­fo­lios. A non-per­form­ing loan refers to where a bor­rower is not mak­ing in­ter­est pay­ments or re­pay­ing any prin­ci­pal, with the pos­si­bil­ity of re­cov­ery deemed doubt­ful. Debts with which there is doubt as to col­lectabil­ity.

This is ac­cord­ing to Cen­tral Bank Deputy Gov­er­nor Dr. Bwalya Ng’andu. Dr Ng'andu re­fused to dis­close the af­fected banks out the nine­teen (20) reg­is­tered com­mer­cial banks. He was speak­ing at the pub­lic hear­ing re­gard­ing the re­struc­tured In­ter­mar­ket Bank Cor­po­ra­tion -IBC now to be called the Zam­bia In­dus­trial and Com­mer­cial Bank - ZICB which is set to re-open by Novem­ber this year, a year ex­actly af­ter it was re­pos­sessed by the Cen­tral Bank.

Dr. Ng'andu fur­ther stated that de­pos­i­tors with out­stand­ing bal­ances in the de­funct IBC will not be given any in­ter­est for their money be­cause the Bank was non-op­er­a­tional. He fur­ther con­firmed that the New Man­ag­ing Di­rec­tor of ZICB is Mr. Ig­natius Mwanza. He also con­firmed that NAPSA, In­dus­trial De­vel­op­ment Cor­po­ra­tion -IDC, Madi­son Group are some of the share­hold­ers of the ZICB.

Mean­while Dr. N’gandu said that it is im­por­tant that com­mer­cial banks pub­lish sim­pli­fied books of ac­counts to as­sist the gen­eral pub­lic be in­formed on fi­nan­cial per­for­mance of the com­mer­cial banks.

“It is im­por­tant that Banks pub­lish the ac­counts but you; their clients must also read the state­ments, if you can­not read the ac­counts, then find some­one to as­sist in the in­ter­pre­ta­tion of the fig­ures so that there is feed­back” he stated.

And Dr. N’gandu said that the new fi­nan­cial reg­u­la­tions in place that re­quire banks to have the in­creased fi­nan­cial cap­i­tal re­quire­ments came at the right time as more com­mer­cial banks could have gone un­der from 2012 to date as a re­sult of the global eco­nomic down­turn.

“The min­i­mum cap­i­tal re­quire­ment has acted as a safe­guard to bank’s op­er­a­tion in Zam­bia, no won­der there is re­silience and sus­tain­abil­ity, and we have not had a bank wind­ing up busi­ness of late” he said.

The min­i­mum pri­mary cap­i­tal re­quire­ment for com­mer­cial banks is now stand­ing at ZMW104 mil­lion for lo­cally owned banks and ZMW520 mil­lion for for­eign owned banks.

Con­trary to gen­eral pub­lic per­cep­tions, “Banks do not al­ways have a good day that is why as a reg­u­la­tor, we en­sure that we keep mon­i­tor­ing banks that have higher ra­tios of non - per­form­ing loans. The Cen­tral Bank is in con­stant touch with the af­fected banks to har­mo­nize their books” he promised.

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