Debating a motion raised by Murehwa West Member of
Parliament Farai Jere in the National Assembly on proposed amendments to the
Depositors Protection Act, most legislators were agreed that there are glaring
gaps in the Act which need to be filled for it to adequately protect depositors,
many of whom lost their savings when some banks closed in the past.
Former deputy Minister of Finance who is also Zaka South MP
Clemence Chiduwa said current legislation does not protect small depositors in
the event of insolvency.
He said under the amended DPA Act, top bank executives and
founders should face the music when their enterprises fail.
“The law should also bar such directors from taking public
office and I am proposing again that as we amend the new DPA, there is need for
us as an august House to ensure that those who presided over failed banks
should not be allowed to re-open banks.
“Having looked at the DPA and what is obtaining on the
ground now, we have seen that the new Insolvency Act does not cover the
liquidation of banks. Already it shows that there is a gap there. In the event
of the closure of a bank, the small depositors can only be protected through
Presidential Powers. This is because we do not have the banks covered under the
new Insolvency Act.
“So I am saying we need to close that gap. I am also
proposing that going forward, the new law should bar directors, shareholders of
failed
banks from benefitting from their wrong doing. What is
happening now is that those who presided over failed banks now need (to sell) a
Toyota Vitz to compensate all the depositors and the residual assets are then
given to the shareholders. I think there is need for us as this august House,
to ensure that the depositors are protected,” said Chiduwa.
Dzivarasekwa MP Edwin Mushoriwa concurred with Chiduwa on
the need to tighten penalties for failed bankers.
“We have had banks like Trust Bank, Time Bank, Barbican,
Kingdom and ZABG amongst the banks that the Central Bank did close,” he said.
“We need to at least make sure that we come up with a
mechanism of restoring confidence within the banking sector. If you do an
analysis of all the shareholders of the banks that were closed, if you look at
them, they are now 200 times richer than they were. They have simply taken
advantage of our economy. They have taken advantage of the movement of our
currency. Where the currency was depreciating, they have made sure that – when
we came to 2019, they took advantage and were now in a position where they can
easily pay off a debt which they were failing to pay,” he said.
Corban Madzivanyika, MP for Mbizo said the new Act should
bring stiffer penalties to bankers who misuse depositors funds.
“We have also witnessed banking executives extending loans
to their friends and companions without proper credit risk exposure analysis
and after some few years, we are told the loans have now failed.
“We cannot have such kind of non performing loans that are
because ofbpoor credit risk exposure management. In light of that Mr Speaker, I
wish that the Deposit Protection Act be amended to proffer stiffer penalties in
that instance,” he said.
Contributing to the same debate, Goromonzi West MP Beater
Nyamupinga said women are now afraid to bank money because of past experiences.
“As women, we are being troubled because we cannot bank our
money, we are afraid. Our husbands know that we are keeping money at home and
they want the money. We are being beaten because we keep the money to
ourselves,” she said.
Legislator for Gutu East, Benjamin Ganyiwa said the DPA
should be amended to make sure anyone who loots depositors funds faces the
music.
“We should not beat about the bush with this law. We should
amend it accordingly to say if you misappropriate funds, you should face the
consequences.We meet some of them in restaurants and they are very healthy.
They have swipe cards and they get money on ATMs outside the country.
Nothing has changed with them. I saw the other one on
podcast, he was asked where the bankers’ money was and he said that one you can
go and check with the Reserve Bank at the Deposit Protection Unit and they will
tell you that I do not have any loan,” he said.
Weighing in Chikanga legislator Lynette Karenyi said there
are “many graves” which were caused by misappropriation of people’s monies by
banks.
“We implore this august House to put in place a law that
revolves around the issue of depositors’ savings,” she said.
Nyanga South MP Supa Mandiwanzira however disagreed with
his colleagues saying there was need to give individuals who fail another
chance.
“Members that relate to how failed banks or failed bank
executives must be treated, sometimes it is not the responsibility of bank
executives in one particular bank. So to propose some suggestion that I have
heard in the House that anyone who has been working for a financial institution
or bank that has failed must not then be given any other opportunity in life to
start another bank, would be extreme to have a law to that effect because what
it means is that we are not allowing people to try,” he said.
“Anyone who has been in business understands that failure
is an important aspect of business. You must fail in order to succeed.
Therefore, we must not have a law that makes our people afraid to even get into business.”
No comments:
Post a Comment