Reprieve for Foreign Banks

Biti was speaking at a farewell function in Harare for the two central bank governors who are leaving the board. He said if the country tempers with the financial sector it will be a disaster. Biti has said if there are serious locals who can meet the minimum capital requirements to form their own bank they should approach authorities to be given licences to operate.

“We are saying for the banking sector it can’t be 51 percent, because banks do not generate money,” Biti said at the function to bid farewell to two Reserve Bank governors.

“If you temper with this sector you cannot have capital, capital fluid it will move. It is a sector you cannot touch. Banks are like a conveyor belt or a paddock, a paddock is as good as what is in the touch. This is not a sector that you can touch. They are playing their role, this is government policy. You can’t squeeze water out of a stone.”

Biti’s statements were supported by central bank Chief Gideon Gono who said the call by indigenisation supporters to make banks cede majority of their shares can be of advantage in the short-term but can result in serious consequences later for the financial services sector.

“It is not right to destabilize the banking sector for short term gratification that leads to unintended consequences. Let us have order in the financial sector,” Gono said.

“A bank is different from mining and manufacturing sector,” he added.

President Robert Mugabe’s Zanu PF officials are pushing for indigenisation of most foreign companies for the government and locals to own majority shares in something that independent analysts have said is meant to lure support to Mugabe and his party towards the general elections that may be held this year.

Mugabe and his party have denied this, but claim that this is meant to share wealth to all the local people. Foreign banks operating in Zimbabwe include Stanbic, Standard Chartered Bank and Barclays.