No need for panic over Intermarket Bank-Saasa

Sat, 03 Dec 2016 10:18:48 +0000

INTERMARKET Banking Corporation Zambia Limited which was closed last Tuesday after the Bank of Zambia took over its operations will open soon because the Central Bank is capable of running any bank they repossess as it has proved in the past, says Economist Oliver Saasa.

Meanwhile, Prof. Saasa warned that small banks in Zambia also risked being taken over by the Central Bank because of liquidity challenges. Prof. Saasa, in an interview with the Daily Nation, said that there was nothing to worry about following the closure of Intermarket Bank because the financial institution would open soon as BOZ was smoothening things.

He explained that this was not the first time that the Central Bank was taking over operations of a bank that was insolvent and that they had taken over banks in the past and ironed out crises. Prof. Saasa, who is also on the board of directors for Stanbic Bank Plc, said that banks also deposited a certain amount of money to the Central Bank which helped them recover in case of a crisis. He assured the public that the Central Bank also monitored the operations of all banks in the country and that it was capable of running any of them if they collapsed.

Prof. Saasa also said that the temporary closure of Intermarket Bank was done to protect depositors, whom he said would have been rushing to deposit more money if they thought the situation was stable. “Closing a bank is done to protect depositors because they put a lot of money when they think everything is alright. It also protects other banks transacting with it through overnight lending, banks lend each other money,” he said. Prof. Saasa reiterated that closing a bank was the last resort for the Central Bank and that above all it tried to correct the situation.

Meanwhile, Zambia Direct Democracy Movement (ZDDM) vice-president Charles Kafumbo, however, called on the Central Bank to be considerate of the people whose salaries was still caught up in the bank. Mr Kafumbo said that the closure of the bank was a punishment on innocent customers and that the move was making Government unpopular.

He pointed out that the closure had been done at a wrong time because this was a time when people were paying rentals, sending transport money to pupils in boarding school and other responsibilities. Mr Kafumbo advised the Central Bank to speed up whatever they were doing during this closure for the sake of the vulnerable clients whose salaries were caught up in the bank.

“BoZ should be responsive to the cries of the vulnerable clients whose salaries have been caught up in the bank. They should see to it that their salaries are paid immediately,” he said.