NANCY MWAPE, Lusaka
THE process of putting up a management team to run the affairs of Intermarket Banking Corporation (IBC) that is currently under possession by the central bank has advanced.
IBC was placed under the possession of the Bank of Zambia (BoZ) in November last year due to its insolvency, inability to meet its financial obligations and, consequently, posing a threat to financial systems’ stability.
During a media briefing last week, BoZ governor Denny Kalyalya said the process of putting up a management team for IBC has advanced.
“We expect management to make the announcement on the re-opening of the bank not too long from now.
“There is a lot of work that has been done…before everything is put together; it will be very risky to rush to say the bank is open because you will be asking us why we allowed this to happen,” he said.
Dr Kalyalya said the central bank is cautious and at the same time optimistic about the whole process of re-opening the bank.
“As the regulator, it is BoZ’s desire to open the bank,” he said.
He, however, said efforts to have the bank opened are somewhat slower than was anticipated to take.
“We took position of the bank because it was insolvent…In having it opened, we would want to be very sure that those elements that led to the unfortunate situation are no longer there,” he said.
Dr Kalyalya said it is important that the bank meets its minimum capital requirement of K104 billion.
In 2012, the central bank raised the capital requirements for commercial banks and non-bank financial institutions to enable them absorb losses on a going concern basis.
The minimum capital requirement for commercial banks was adjusted to K104 billion for locally-owned banks and K520 billion for foreign-owned ones.
He said some of the institutions were given plans of how to meet the requirements and are still working on that.
“With the opening of IBC, we don’t want to get into a similar situation again. We want to have all the money upfront so that when it opens, it is a [financially] strong bank,” he said.