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Citizens need assuarance of financial sector stability

THERE is apprehension in the country following the declaration of Intermarket Banking Corporation Zambia Limited insolvent by the Bank of Zambia (BoZ).
It has been a while since a commercial bank was declared insolvent by the central bank.
Bank closures remind depositors about the sad past when Meridian BIAO, Prudence Bank, Commerce Bank, Credit Africa Bank, First Merchant Bank, among others, went under.
Most of them closed down after the transition from one party to multi-party system.
Then BoZ was not stringent with requirements. That is now history.
Hence, the latest decision by the BoZ to declare Intermarket Banking Corporation, has therefore come as a surprise to many and has left so many questions unanswered.
People think that BoZ has been on top of things with regards to supervising banks.
What measures, for instance, did BoZ, which is mandated to ensure financial system stability in the banking sector, take to ensure depositors will not cause panic at the news of their bank closing?
Could it be that Intermarket Banking Corporation Limited had been limping for years now?
What did the bank’s external auditors say and what was BoZ’s opinion?
It is comforting, however, because Minister of Finance Felix Mutati has assured the nation that the banking sector remains stable despite BoZ putting Intermarket Banking Corporation Zambia Limited on ice.
Mr Mutati told Parliament in a ministerial statement on Thursday that all banks, including small ones, are still sound and urged customers to continue keeping their money with the banking institutions.
Mr Mutati assured BoZ will remain committed fulfilling its mandate of maintaining stability in the financial sector.
Mr Mutati said the possession of Intermarket Banking Corporation Zambia Limited by BoZ is pursuant to Section 81 of the Banking and Financial Services Act Chapter 387 of the Laws of Zambia.
Mr Mutati said in ensuring that the financial sector adheres to the legal and prudential requirements, BoZ routinely undertakes inspections of financial institutions.
While Mr Mutati has said that the declaration of insolvency of Intermarket Banking Corporation Zambia Limited by the central bank has insignificant impact in the financial sector, the mood on the streets is different.
People are so apprehensive that they may start keeping money in their pillows and barns for fear of their banks collapsing, what with the speculation that more banks are in line to close.
Therefore, the BoZ must continue engaging the public on the status of the financial sector in the country.
It will also restore the confidence of the investors as the country continues being the preferred investment destination in Africa.