The Sunday News
Judith Phiri, Business Reporter
THE Reserve Bank of Zimbabwe (RBZ) has said it will monitor compliance and take appropriate supervisory action against any non-compliant institutions that fail to adhere to the directive on suspension of lending.
President Mnangagwa, last Saturday announced the suspension of lending by banks in order to minimise the creation of broad money that is prone to abuse for purposes of manipulating the exchange rate for financial gains and to allow current investigations.
He directed the suspension of lending by banks to both the Government and the private sector with immediate effect until further notice.
In a memo to Chief Executive Officers/ Managing Directors of all Banking Institutions, Development Finance Institutions, Deposit Taking and Credit Only on Monday, RBZ Bank Supervision director, Mr Philip Madamombe said they will monitor compliance to the directive.
“The Reserve Bank will monitor compliance with the above directive and will take appropriate supervisory action against any non-compliant institutions. We advise accordingly,” said Mr Madamombe.
RBZ’s decision comes after the National Announcement of 7 May 2022, made by the President Mnangagwa, on Measures to Restore Confidence, Preserve Value and Restore Macroeconomic Stability, and the subsequent meeting of representatives of the banking sector with the Governor held on 9 May 2022.
“We bring your attention to paragraph 40 of the Presidential Announcement on the suspension of lending by banking institutions, building societies, development finance institutions, deposit-taking and credit-only microfinance institutions to the Government and private sector.”
Mr Madamombe added: “For the avoidance of doubt, this suspension relates to all lending, whether local currency or foreign currency, to Government and the private sector, including corporates, other legal entities and individuals.”
He said they further confirm that no new credit facilities should be issued as the suspension covers new loans, undrawn portions of agreed facilities, overdrafts and other forms of borrowing instruments, by whatever name they are called.
Mr Madamombe said with respect to pipeline transactions, where all the facility terms and conditions have been met before the above pronouncement, institutions may approach the Reserve Bank for consideration, on a case by case basis.
“Please take note that the suspension of lending does not apply to offshore drawdowns.”