Three collapsed banks reopened on Monday in Zimbabwe under the aegis of a new umbrella banking group that President Robert Mugabe’s government hopes will revive the ailing financial sector.
Clients whose money was locked up in the Royal, Barbican and Trust banks — shut down last year — queued up from morning nationwide to withdraw their funds at 22 branches of the new Zimbabwe Allied Banking Group (ZABG).
But angry customers complained their money is still locked up.
”I came here under the impression that I would be able to access all my money, only to be told I would not be able to get anything above Z$5-million [about R4 800],” Edgar Chidavaenzi, a farmer, said at a ZABG branch in downtown Harare.
”I need money to pay for labour and electricity and all my money is still locked up.”
A ZABG official, who declined to give his name, said account holders in the three collapsed banks will only be able to withdraw a one-off sum of Z$5-million from the ZABG, while the rest of their savings will be turned into shares.
”Clients will have shares in ZABG and they can decide whether to sell their shares or not when the bank registers on the Zimbabwe Stock Exchange. Opening an account is not a means by which to access your money,” she said.
The ZABG initially comprises the three banks but other distressed banks are expected to join.
Zimbabwe’s financial sector was wracked by its worst crisis last year that left seven banks under curatorship and three financial institutions liquidated.
”We need money at the moment, not shares in ZABG, and this is confusing now because we thought the purpose was for us to access our funds,” said account holder Gilbert Kayaya, walking out of a ZABG branch with a sheaf of forms. ”We did not expect all this confusion.”
The central bank plans to inject Z$2-trillion into the ZABG.
Reserve Bank Governor Gideon Gono, who has been tasked with trying to revive the moribund economy, set up the ZABG to help distressed banks.
Zimbabwe is trying to revive its tattered economy, which is plagued by high unemployment levels, poverty and the highest inflation rate in the world.
The problems stem partly from the country’s isolation from its former trade partners in the West after Zimbabwe embarked on its controversial land-reform programme in early 2000.
Inflation officially dropped to 132,6% in December from a peak of 622,8% in January last year, and Zimbabwe has managed to arrest the free fall of the local currency, but inflation is still startlingly high at 70%. — Sapa-AFP