Fri, 02 Dec 2016 09:59:09 +0000
THE propaganda by some opposition parties on social media that the entire financial system has collapsed when it is actually only one bank facing operational challenges shows a misguided opportunistic agenda.
What is certain is that the country is not in a financial crisis. The Central Bank simply acted according to its legal mandate to take possession of a bank that was under capitalised, hence failed to meet its obligations as they fell due.
The long queues that characterised many banks’ Automated Teller Machines (ATM) in the aftermath of the BoZ announcement of the Intermarket Bank takeover show how unsettled the public was.
However, assurances by the Bank of Zambia that the banking sector remains resilient, adequately capitalised and sound despite taking possession of Intermarket Banking Corporation Zambia Limited settles the dust.
The BoZ statement to dispel rumours of another impending takeover of some banks gives the public a sigh of relief knowing that the situation is under control and that therefore, no need for raising alarm and panic.
What has to be understood is that this is not the first time that the BoZ has taken possession of a bank or financial services company.
The Central Bank has taken such action several times in the past to protect the financial sector from negative practices.
The prevailing financial status of the commercial bank or financial services company is what usually necessitates such action by the Central Bank.
The Central Bank categorical testament to diffuse this highly speculative tension in the banking sector must assure the investors and the public that the situation is under control.
It is merely coincidental that the takeover of Intermarket Banking Corporation happened at the month end when many account holders were anxiously anticipating to draw their salaries or meet their daily business transactions.
It is basic knowledge that shocks of instability in the financial sector have proportionately adverse effects in the economy for obvious reasons.
Under the circumstances, it becomes highly probable that key economic players panic, resulting in them hoarding their money, thereby limiting its circulation through established financial entities such as banks.
All this arises from public perception that banks may not the safest places in which to save their money.
And we think this was the reason it was fundamentally important for the BoZ to dispel this aura of uncertainty hovering over the banking sector.
We urge the Ministry of Finance to ensure speedy preparation of the Statement of Affairs of assets and liabilities of the Intermarket Banking Corporation Zambia Limited not only to reassure the affected depositors of accessing their money, but also inspire confidence in the financial sector.
