|POSB to turn into commercial bank Dumisani Nsingo|
|Saturday, 05 January 2013 17:13|
Business ReporterTHE People’s Own Savings Bank will soon be turned into a commercial bank after Cabinet approved the restructuring and privatisation of the financial institution.
State Enterprises and Parastatals Minister Gorden Moyo said the decision to restructure and privatise POSB into a commercial unit was approved by Cabinet.
“We made a decision as a ministry to privatise POSB through the Inter-ministerial Committee on Commercialisation and Privatisation of Parastatals and the decision was taken to Cabinet and was rectified and it is such that Government which owns 100 percent will be left with 51 percent and 49 percent going to strategic partners.
“POSB is a grassroots bank for the poor and small to medium enterprises (SMEs) and it is going to retain that component but we are creating a commercial unit to compete with other commercial banks and improve on its technological aspect. Its social side will remain to assist the poor people and SMEs,’’ Minister Moyo said.
He however, said the Ministry of Finance will have to come up with a statutory instrument for the amendment of part of the People’s Own Savings Bank (POSB) Act so as to facilitate the changing of the financial institute into a commercial bank.
The bank was established in 2000 after the unbundling of the Post and Telecommunications Corporation (PTC) in 1999 which resulted in the creation of four entities, namely Zimpost, NetOne, TelOne and the POSB. POSB is a deposit taking institution administered under the POSB Act. The bank is supervised by the Reserve Bank of Zimbabwe (RBZ) in terms Sections 45-52 of the Banking Act. This supervising and investigative role on the POSB was effected through Government notice 101 of 2005.
The POSB is not required to comply with the minimum capital requirements prescribed by the RBZ and is also exempted from corporate tax payments.
However, in order to attract a suitable partner who is able to promote the current POSB mandate, several sections of the current Act should be amended.
A typical section that would need amendments is section 5 which states that the entire board shall be appointed by the minister. In this regard, a strategic partner with 49 percent equity stake might not be comfortable with this arrangement hence the need for amendment.
Adding a commercial unit will mean that Section 4 of the POSB Act will be amended to include the activities of a commercial bank and entails the POSB retaining its current identity and functions.
“The privatisation of POSB is provided in the Act and it’s only for Government to implement it but there is need for amendment to introduce a commercial unit and that’s the Ministry of Finance which has an oversight and will come up with the necessary statutory instruments,’’ Minister Moyo said.