Reserve Bank of Zimbabwe (RBZ) Governor Dr Gideon Gono has raised the capital thresholds for commercial and merchant banks from $12.5 million to $100 million. That's quite dramatic in my opinion. Our economy is currently small to have banks to be capitalized at a minimum of $100 million. This will push out, mostly indigenous-owned players out of the business.
The economy has been in a bad patch but in trying to answerthe question of why there is indiscipline in the banking industry and why some are failing, pushing he minimum capital thresholds isn't the effective solution. Essentially he's blaming low capital requirements for banks as the main cause of the sector's problems.
He hasn't5 explained why that $100 million figure is the perfect one. There hasn't been research to that effect. He's hiding the fact that the RBZ has poor risk assessment and management mechanisms which are the ultimate cause of this crisis. Why were warning signs not spotted? We expect more from you, Gono.
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