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Zambian gov't assures of stable banking sector

Xinhua, December 2, 2016 Adjust font size:

The Zambian government has assured that the banking sector was stable despite the takeover of one bank by the country's central bank, senior official said on Friday.

On Tuesday, the country's central bank, the Bank of Zambia (BoZ), took over operations of Intermarket Banking Corporation after it became insolvent and not in a position to meet its obligations as they fall due.

This has caused consternation among stakeholders, with unconfirmed reports indicating that more banks are expected to be closed because of the high minimum capital requirement.

But Minister of Finance Felix Mutati said the financial market in the country was stable despite what has happened to Intermarket Bank.

He said in a ministerial statement delivered in parliament that all banks in the country were sound and urged customers to continue keeping their money with the banking institutions.

"Mr. Speaker, the government wishes to inform the general public, the banking community and all interested parties, the banking sector currently remains stable," he said.

He said the possession of Intermarket Bank b7 the central bank was done in line with the financial and banking law and one way of ensuring that there was minimization of losses to depositors and employees.

He however said the government will wait for a report from the central bank on what will happen to depositors and employees of the bank.

He has since urged members of the general public to refrain from speculating on matters that have the potential to cause alarm and panic to customers of banks because of the sensitivity of the financial sector.

But Dr. Lubinda Haabazoka, a Senior Lecturer of Economics at the Copperbelt University (CBU) said the takeover of one bank by the centrl bank was an early warning sign that more banks with less capital will go the same route.

He has since urged the central bank to quickly operationalize the operation of a Deposit Insurance Scheme to ensure the protection of depositors.

"The current situation where depositors and other lenders have to wait for BoZ to establish the asset and liability status of the bank then follow the priority of creditors list will mean that some depositors will have to wait for years to lay their hands on their deposits," he said. Endit