{Zimbabwe is facing yet another gloomy festive season as local banks reel under a biting liquidity crunch that has seen the return of long queues and the reimposition of unpopular cash withdrawal limits.}
Renewed trouble in the banking sector is certain to pile pressure on President Robert Mugabe’s ruling Zanu (PF), which is grappling to arrest the economy’s decline.
Scenes of long queues at banks will bring back memories of the days of hyperinflation in 2008.
The Reserve Bank of Zimbabwe earlier this month canceled the licence of Trust Bank, over allegations of abuse of depositors’ funds and violation of banking laws. This sparked a fresh round of depositor anxiety over the banking sector. Last year saw the cancellation of the licences of two banks, Interfin and Genesis Investment.
Mr Mugabe’s response has been to push for the implementation of the party’s economic blueprint, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset), which was debated by his Zanu (PF) party at a weekend conference held in Chinhoyi.
Ugly scenes of violence and vandalism have erupted at several banks in Harare, Bulawayo and Mutare in recent days as angry depositors vented frustration over their inability to access funds.
On Monday, soldiers assaulted a bank official at Allied Bank in Harare, and there was a stampede at Metbank’s Bulawayo branch. Earlier this month, a bank manager at Metbank’s Mutare branch had to be taken into police custody after angry depositors demanded mob justice.
A bank official at Metbank said on Tuesday: “We are not limiting withdrawals for teachers, but for other clients. It all depends on our allocation. The situation is really bad for the time being.”
Stephen Gwasira, Allied Bank CE, said the incident at its Harare branch was “unfortunate”. The bank was making “aggressive efforts to address the liquidity constraints”.
Economic commentator Farai Murambiwa said volatility in the banking sector was a direct consequence of the Reserve Bank of Zimbabwe’s failure to fulfil its function as lender of last resort.
Finance Minister Patrick Chinamasa is expected to present the budget statement to Parliament on Thursday after a month-long delay.
Bdlive
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