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Martin Tarusenga
Sentiments coming through pensioner organisations indicate that pensioners and other owners of pension and insurance funds have at least been given hope by Government undertaking to set up a Commission of Inquiry into the disputed pension benefits as entitled by insurance companies — never mind the time it is taking Government to set up the Commission.

Credit must be given for this positive development to the large numbers of principled pensioners and other categories of pension fund membership that continue to subscribe overwhelmingly to the cause to secure full rightful pension benefits.

What has, however, started as a cause only for full pension rights, has made this constituency of pensioners and pension fund membership realise that their rights to pension funds are similar to their rights to banks, and that the strategy used by their pensioner organisations can be used to demand their rightful dues from banks and related shorter deposit taking institutions.

This has occurred as many belonging to this constituency had made various types of investments in banks and such other similar institutions.

The institutions include commercial banks, investment banks unit trusts, building societies, among others. Almost every thus affected member of the pensioner groups had made at least one of a bank account, a unit trust investment, paid up permanent shares (PUPS), in at least one of the said institutions.

And in all cases the bank and similar institutions in question, casually told these investors to forget about the investments/deposits that they made prior to the introduction of multi-currencies.

These investments (they said) had been “eaten” by inflation. Invariably this was intimated to the investors as if the issue was trivial and/or as if the investor’s request for full rightful dues was unimportant. Just as in the stand-off on pension benefit rights, the arrogant institutional impunity when institutions commit crimes against the vulnerable public thus shows up.

Of course few people in this world, if any, can ‘forget’ about investments that they made consciously from their hard earned money, and to achieve specific life objectives.

With a good appreciation of financial concepts used in the strategy to demand rightful pension benefits, leading to this pending Inquiry, there is an apparent resolution to pursue a strategy demanding their full rightful dues from banks, and to the end — thereby curbing such institutional impunity.

On their part they are particularly encouraged by some court rulings and other market developments.

The court rulings include the June 2014 court ruling that outlawed settlement of debts/obligations in Zimdollars (the Herald 14 June 2014), the Supreme Court ruling in October 2013 compelling Standard Chartered to pay back China Shougang International, after Standard Chartered attempted to dishonour its obligations using some excuses, and the High Court Ruling ordering the Reserve Bank of Zimbabwe (RBZ) to return US$1 million to Trojan Nickel Mine.

Government decision to profile the Deposit Protection Corporation to the public in a more or less a concerted way, and indeed the pending pension Commission of Inquiry are other market developments favourable for this cause.

Propelled by the established fact that banks and other financial institutions take money from the public only because the money has value, and can readily be transformed into other valuable assets, and contractually guarantee a return of the monies, these investors are on a trail to implement the apparent resolution to secure their rightful dues from banks.

The money in question is the Zimdollar, prior to its total loss of value.

Several of these investors have written to banks that have so apparently defaulted, and/or written to the central bank, the RBZ, in an act of appeal.

If the tone of the RBZ, as captured in its stance on Tetrad Investment Bank’s treatment of its depositors is anything to go by, the investors have a chance of securing their rightful dues. And it is time the RBZ acted when it is recalled that to date Zimbabwe has suffered an unacceptably high number of bank failures that prejudiced members of the public. These failures include those of the Universal Merchant Bank, United Merchant Bank, Zimbabwe Building Society, Royal, Trust, Barbican, Genesis and Renaissance.

A failure by the central bank in these circumstances would be to encourage institutional default against the public, and risks further denting confidence in the Zimbabwe banking system.

Apart from the activities to profile the Deposit Protection Corporation to the public, the central bank’s arsenal of actions to curb bank abuse of institutional power against the public, and to curb the defaults thereof, should include decisive action to ensure complaints against banks from members of the public are fully examined.

The central bank should further require full bank compliance with established bank regulation practices such as Basel III, aimed at instilling discipline in bank management. In the latter regard the RBZ implementation of the Basel III risk control system as reported in the Monetary Policy Statements since 2007, must lend itself to public verification on progress. Unfortunately these Statements do not say categorically how far the central bank has gone in implementing Basel III, raising questions on the central bank’s commitment to restraining banks from abusing the banking public.

• Martin Tarusenga is General Manager of Zimbabwe Pensions & Insurance Rights, email, [email protected] <mailto:[email protected]>; telephone; +263 (0)4 883057; Mobile; +263 (0)772 889 716. Opinions expressed herein are those of the author and do not represent those of the organisations that the author represent