Zimbabwe: Foreigners Welcome to be Bank Directors – RBZ
Following previous announcements we have made on proposed amendments to the Banking Act [Chapter 24:20], it has come to our attention that there is misinterpretation and misrepresentation regarding levels of shareholding in banking institutions and matters concerning directorships.
2. The Reserve Bank of Zimbabwe wishes to advise that the process of amending the banking laws is on-going and stakeholder consultations will continue in different forms until the process is completed.
3. For the avoidance of doubt, we wish to clarify that the proposed changes in shareholding limits are not meant to result in divestiture of shareholding.
4. The Banking Regulations S. I. 205 of 2000 currently limits shareholding of companies, other than financial entities, to 10% of the banking institution’s voting shares while individuals may own up to 25% of the banking institution’s voting shares.
5. In terms of the Banking Regulations, financial institutions in Zimbabwe or financial institutions under the supervision of a financial services regulator outside Zimbabwe are allowed to take up to 100% shareholding in a banking institution in Zimbabwe.
6. Further take note that the current banking laws provide for situations of acquisition of significant interest, which may be in excess of the thresholds specified above in specific instances such as where a banking institution is faced with undercapitalisation.
7. Cognizant of the fact that institutional shareholders, unlike individuals, are more likely able to inject additional capital when called upon to do so, proposals are being made that shareholding limits for companies be increased from the current 10% to 25%.
8. Concerning the issue of directorships, the Reserve Bank of Zimbabwe wishes to confirm that any person, whether local or foreign, may be appointed to be a director of a banking institution as long as they meet the qualification criteria spelt out in the Banking Act [Chapter 24:20].
9. As Monetary Authorities, we continue to remind members of the public that the stability of the banking sector is a function of the cooperative efforts and goodwill of all stakeholders and we encourage this cooperative spirit among all stakeholders.
DR. J. P. MANGUDYA
6 JUNE 2014