VICE President Phelekezela Mphoko yesterday blasted banking executives for abusing depositors’ money in the wake of a litany of bank failures caused by reckless lending and abuse of depositors’ funds.
Officially opening the National Building Society branch in Bulawayo, the Vice President challenged the building society’s management and staff to safeguard depositors’ funds.
“It would be remiss if I don’t take time to remind NBS’ board, management and staff of their fiduciary responsibility to safeguard depositors’ money.
“We’re coming from a history of bank failures that have been spurred by reckless lending and abuse of depositors’ funds by bank executives and boards,” he said.
The NBS Bulawayo branch is the building society’s second outlet following the commissioning of its first branch in Harare last week.
NBS was created out of the National Pension Scheme and the Workers Compensation Insurance Fund.
Both funds are administered by the National Social Security Authority, which is the sole shareholder in NBS.
Since the adoption of a multi-currency system in February 2009, more than 10 banks, among them Genesis Investment Bank, Tetrad, Interfin and Royal Bank have collapsed due to lack of proper corporate governance systems.
Against this background, depositors have in the past lacked confidence with the country’s banking sector, which has resulted in many people resorting to keeping money at home, thereby fuelling cash shortages in the formal economy.
VP Mphoko said due to bank failures and abuse of depositors’ money, the Government has approved amendments to the Banking and Reserve Bank Acts, which would deal ruthlessly with offenders.
“These amendments give birth to a regulatory framework that allows more oversight, promotes good governance and punishes those who abuse public funds.
“We anticipate that as the shareholder representative in NBS, the same high standards of
transparency will cascade down.”
VP Mphoko said the formation of the NBS was in line with Zim-Asset’s pillar on social service and poverty reduction, which mandates NSSA to deliver affordable housing to Zimbabweans.
“Zimbabweans of all social classes, incomes and backgrounds yearn to build or buy their own home and we trust that NBS is here to bring that dream within reach. NBS is a positive for Zimbabwe in general and Bulawayo in particular. This is a homegrown building society giving unequivocal vote of confidence in the nation,” he said.
“We hope this will also give a cue to other investors, both local and foreign, to come and do business here in Bulawayo and the hinterland.
“This region is primed for development and it’s looking to attract partners that will exploit the vast opportunities that are here.”
VP Mphoko said NBS would facilitate businesses in construction, property development, real estate and building supplies to play their role in economic development.
“As Government we’re hopeful that NBS can add much needed impetus to efforts that will ensure liquidity is brought into formal channels.”
He said the Government was encouraged that NBS intends to support the national financial inclusion strategy that is premised on four pillars — financial innovation, financial literacy, financial consumer protection and micro-finance.
VP Mphoko said the strategy seeks to bring closer the achievement of key economic milestones enunciated in ZimAsset and to ensure broad-based economic empowerment of Zimbabweans.
Beyond housing, he said, the Government was working on a series of other measures to cushion workers and the generality of Zimbabweans.
Speaking at the same occasion, Public Service, Labour and Social Welfare Minister Prisca Mupfumira said NBS’s main mandate was to ensure low income earners enjoy the right to affordable housing.
“Secondly, it is mandated to deliver services that meet the needs of the people of Zimbabwe, including those that have been previously marginalised and left out of the formal banking system,” she said. CHRONICLE