Tutwa questions BOZ negligence in Intermarket

Tutwa Ngulube: Fie picture

FINANCE minister Felix Mutati yesterday dodged questions on whether the Bank of Zambia was negligent in monitoring operations of Intermarket Banking Corporation.

This was during a question and answer session in Parliament yesterday after the minister gave a statement on the re-opening of the bank after it was shutdown in November last year due to insolvency.

Kabwe Central PF member of parliament Tutwa Ngulube asked Mutati to confirm or deny whether the Central Bank was in some way negligent in the manner they monitored the bank.

In response, Mutati said: “(the) Bank of Zambia took possession of the bank having worked with the shareholders.

The shareholders committing to create credible solution which never happened and for that reason, they took possession.”

Later, the finance minister skipped one of the questions from Mazabuka UPND member of parliament Garry Nkombo who wanted to know whether there were “any criminal elements from the old structure” of the bank to which Mutati responded:

“The exercise that has been done in restructuring the bank is. One, … shareholding has been restructured and the current shareholders will become a minority.”

This forced Speaker of the National Assembly Dr Patrick Matibini to intervene saying, “There was the aspect of criminality to that question.”

In response, Mutati said: “Mr. Speaker, the issue of negligence, whether criminal or otherwise will be dealt within the context of the Banking and Financial Services Act.”

Mutati had earlier told Parliament that the bank would be open to the public within the next 30 days.

He said a number of steps have been taken by BOZ to keep the bank afloat. Some of the measures include changes to the shareholding structure and trade capital injection.

And Mutati asked Intermarket Bank customers to continue banking with the institution once opened as it was now solvent.

“When you cross over to solvency, it means that your assets are greater than the liabilities, so even when we withdraw the money you still have a positive position, so we are not worried if people want to withdraw but we are also expecting that people that have been dealing with the bank will also continue to deposit should they decide to withdraw, they will be no insolvency,” said Mutati.

In November last year, BOZ announced their takeover of Intermarket Bank, stating: “the financial service provider is unable to continue its operations in the ordinary course of its business”.

The statement also indicated that the financial service provider’s capital was less than the prescribed minimum.

The Central Bank has since advised all depositors, creditors and the general public to wait for further steps to be taken in the process of effecting restructuring of IBC in line with the Banking and Financial Services Act (BFSA).

         

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