ALLIED Bank is considering recapitalising through a placement of shares to potential investors, failure of which it will downgrade its banking license to a deposit taking micro-finance institution.“The bank will flight a public notice inviting investors willing to inject fresh capital into the bank for some shares and this should be done in the next few weeks,” a source familiar with the development said on Friday.
“If that fails to bear positive results, the bank will downgrade its banking license to deposit taking micro finance.”
Allied Bank chairman Mr Farai Mutamangira could not be reached for comment yesterday while chief executive Mr Steven Gwasira did not return a call seeking comment.
The Reserve Bank of Zimbabwe gave the financial institutions up to December 2020 to be compliant with the set minimum capital requirements but should submit their plans on how they intend to do so by June this year. Commercial banks and building societies will be required to have minimum capital of US$100 million.
Deposit taking micro finance institutions will be required to have a minimum capital of US$20 million. Central bank acting governor Dr Charity Dhliwayo recently advised struggling banks to downgrade and obtain deposit taking micro-finance licences.
Capital Bank, which is owned by the National Social Security Authority is since surrendered it merchant banking license and is seeking a deposit micro finance licence. Local banks, particularly those owned by indigenous Zimbabwe have been struggling to raise capital due to the prevailing liquidity constraints.