Zimbabwe News and Internet Radio

Solvency challenges hit AfrAsia, bank limits withdrawals

HARARE – AfrAsia Bank Limited (AfrAsia) is limiting depositors’ withdrawals due to solvency challenges.

Solvency challenges hit AfrAsia, bank limits withdrawals
Solvency challenges hit AfrAsia, bank limits withdrawals

The bank, limiting withdrawals to between $50 and $200 depending on the day, said it was suffering the effects of the prevailing acute liquidity crisis.

“…liquidity constraints in the local economy have affected our normal operations,” spokesperson Sekai Chitemerere told Business Live.

“In an effort to ensure that all our clients have access to available cash, our branches have had to introduce intermittent daily withdrawal limits,” she said, adding that the institution was “working flat out to normalise the situation.”

This comes as the bank, recently rebranded from Kingdom Bank following a  62,5 percent share takeover by AfrAsia Bank Mauritius (ABM), is also making frantic efforts to raise $100 million in fresh capital.

Early this year, ABM committed to inject $20 million in fresh capital into the group in line with Reserve Bank of Zimbabwe (RBZ)’s capitalisation requirements.

This was after the central bank had extended the deadline for a $100 million minimum capital threshold for commercial banks to 2020.

Currently, minimum capital levels are $25 million for commercial banks.

Chitemerere said the ABM was committed to complying with regulatory requirements in the country.

“However, the group is at present unable to provide further details as it is a closed period pending the release of its annual results which are expected to be published shortly,” she said.

RBZ governor John Mangudya had not responded to questions concerning the regulator’s planned action on the issue.

In his maiden monetary policy statement released last month, Mangudya said while the banking sector remained strong, most financial institutions’ efforts to increase their capital positions were constrained by a number of challenges, including the macroeconomic environment and subdued foreign direct investment. Daily News