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The banking sector has hit the 100 percent benchmark in compliance to the $25 million current minimum capital requirement and is progressing towards the $100 million requirement for 2020 with four foreign banks having surpassed $50 million as at 31 March 2016. Reserve Bank of Zimbabwe, Director of Bank Supervision, Norman Mataruka said the central bank is satisfied with the progress made by banking institutions towards meeting the new capital requirements, which are effective in 2020.

“The banking sector remained adequately capitalised and as at March 31, 2016, all banks including foreign-owned banks were compliant with the current minimum capital requirement of $25 million for commercial banks.

“Four foreign banks had capital levels above $50 million and converging towards the $100 million capital requirement for Tier 1 banks,” he said.

The banking sector has eight banking institutions with significant private foreign ownership, while the remaining are locally owned.

Mr Mataruka said in line with the tiered approach it is noteworthy that locally owned banks are making progress towards meeting their recapitalisation targets and as at March 31, 2016, one bank had already surpassed the $100 million threshold which is

effective 2020, while the rest are at various levels.

Mr Mataruka said banking institutions have since submitted their capitalisation plans to comply with the 2020 minimum capital requirements, which will be achieved through a combination of organic growth and fresh capital injection.

“In terms of the recapitalisation plans some banks have indicated that they will achieve compliance by 2017 from organic growth.

“In addition, some institutions which are part of a banking group are rationalising operations by merging commercial banking and building society activities, thereby lowering the capital requirements,” said Mr Mataruka. — Wires.