RBZ cancels Trust Bank’s licence

rbz buildingGolden Sibanda Senior Business Reporter
THE Reserve Bank of Zimbabwe has cancelled the banking licence for Trust Bank over allegations of abuse of depositors’ funds and violation of the Banking Act.
This marks the second time in eight years that Trust Bank has lost its banking licence.
RBZ yesterday said Trust Bank was financially unsound and was not operating in line with sound administrative and accounting practices and procedures.

“In particular, the bank is critically undercapitalised with core capital of US$1.90 million, has been posting persistent loss (cumulative US$18m since inception).

“The institution has been facing critical liquidity challenges emanating from the poor loan book and the inadequate working capital and gross abuse of depositors funds.”

Efforts at recapitalisation, the RBZ said, had all been futile and the bank was no longer safe and sound.
As such, the central bank said, maintaining Trust Bank’s registration as a bank was no longer desirable in the interests of its depositors, members and creditors.

The licence was cancelled in terms of Section 14 of the Banking Act.
The central bank said Trust Bank failed to maintain a base of net assets of a nature and amount sufficient to safeguard its creditors.

In terms of RBZ’s phased regulatory capital thresholds, commercial banks are required to have US$75 million at hand by end of this month (December 2013) and US$100 million by June 2014.

Trust Bank, the RBZ found, could no longer maintain the prescribed minimum amounts of capital and reserves, while it was also accused of engaging in undesirable methods of conducting business.

“As a consequence of the said cancellation, Trust Bank is no longer a banking institution, as defined in the Banking Act, and therefore its status is that of a company registered in terms of the Companies Act (Chapter 24:03).”

The central bank said in conjunction with the Deposit Protection Corporation, it will institute liquidation procedures to facilitate payments to depositors and creditors.

RBZ said it was left with no choice, but to revoke the licence after efforts at resolving issues around abuse of depositors’ funds failed.
This is the second time Trust Bank’s licence has been cancelled following a similar decision in 2005 after it was found that the financial institution had engaged in imprudent banking practices.

Only last week, Trust Bank’s parent company, Trust Holdings Limited, was delisted after the financial services group had failed to meet continuing obligations.

THL had failed to produce quarterly shareholder updates, financial statements for the year to December 2012, the 2012 annual report and pay 2013 sustenance fees in line with listing rules of the Zimbabwe Stock Exchange.

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  • succuba

    “THE Reserve Bank of Zimbabwe has cancelled the banking licence for Trust Bank over allegations of abuse of depositors’ funds and violation of the Banking Act.” – RBZ

    That’s rich coming from RBZ, what did they do with depositors fund when GG was at the helm !!


      If you mean monies in FCAs, may I ask: given the situation prevailing around 2007-8, what would YOU have done?! It’s so very easy to be an armchair critic but a different thing altogether when in the thick of things! By way of illustration, would you let your child die if he/she got very sick and the only money at hand is money that you have to pay back chikwereti?!

      • Japana Hapana

        I would resign

      • succuba

        Theft is theft…. no excuses….. Has the monies been paid back?

      • succuba

        Using your analogy then ZVAZVIRI, how would you feel if your child was in need of a life saving operation, so you go to the bank to draw out our life savings to pay for the operation only to find someone has stolen your money and your child dies? Same same eh!!!

        Stop using stupid hypothetical situations to try to explain why theft is OK… Welcome to the real world.

      • succuba

        Using your “way of illustration” then, how would you feel if your child was in need of a lifesaving operation, you go to your bank to draw out your life savings to pay for the operation only to find someone has opened your private account and stolen your money eventually leading to your child’s death? Same same eh!!!

        Stop using stupid hypothetical situations to try to explain why theft is OK… Welcome to the real world.

  • hondo

    The truth of the matter is that Gono is vindictive. He is fighting Nyemba over a girlfriend from way back. Interfin bank had a hole of over US$120 million which was abused but was never closed. Interfin was given curatorship protection to December 2014! Reason: Gono and Bonyongwe have shares there. Time Gono is arrested. Nyemba worked hard. Nigel Chanakira worked hard. Vingirai worked hard. They have all been closed by Gono for personal vendettas. Next to be closed is Kamushinda and Gono gave this directive before leaving rbz. Reason: jealous

    • Banker

      Please this is not a forum to write nonsense do you know the meaning of banking business ??

    • che guevera

      @-HONDO,,,I thot Gono has since left his job as RBZ governor. Saka apinda papi apa pakuvharwa kwemabank iye akabuda basa??? Tibatsireiwo munenge ndimi murikuziva comrade,,,

    • Dr Gudo

      This is a very shallow analysis

  • haru

    Charity Dhliwayo the acting Governor is Gono’s cat paw. She is closing banks for targetted people. Gono could not imagine going into the streets leaving nyemba and kamushinda thriving. Its all personal. Kereke hokoyo. Your RMC hospital will be closed by Gono thru Zimra. Gono muroyi.


      You must be a dyed-in-the-wool disciple of conspiracy theories!!…does the abuse of depositor funds not matter at all to you?!

  • Sifiso Xolile Ndlovu Zgwanyanw

    With all due respect to the contributors claiming this action is based on a personal vendetta by Gono against Nyemba, the fact remains that Trust Bank did abuse depositors funds and has failed to meet the minimum requirements. Whether Gono and Nyemba were sharing the same whore or not has nothing to do with with the fact that Trust Bank is in a financial hole, has no assets of value and has abused depositors’ funds. Ukabatwa uchiba haungati mupurisa akusunga atumwa nesajeni wawakatorera chimoko and that dzimwe mbavha hadzina kusungwa therefore kusungwa kwako is personal. No, wasungwa nekuti urimbavha, period.

    • shupi

      Why was interfin not closed with $120 million theft hole???

    • HEZVO-KA


  • chaporomoka chamukwenjere


  • shupi

    Can RBZ explain why interfin bank was not closed when it had a hole of $120 millions USD? At least $75 million of this was abused thru insider loans which went unpaid. Gono and Bonyongwe got millions which they did not pay. Gono used rbz account here at interfin to buy shares which were given to bonyongwe. I work at interfin treasury and I know what I’m talking about. We need balance

  • makotose

    There are four More banks closing by march 2014. The sector is rotten. Just a tip of the ice Berg

  • makonese

    I was with Kaya Moto last night. Gono s bid for senate flopped. He was not registered in manicaland. Gono sought refuge from the mess he has caused in the financial sector. Now he has written to Mugabe again asking “for any job” to serve the nation. Shame. Manje Gono wapera. Hokoyo. The end is here. Run away. Inviting Mugabe to your child s wedding won’t help. Too late.

  • Mizha

    How ironic that the cash strapped central bank is revoking a licence for Trust Bank

  • patroit

    please can someone look at Telecel also.no dividends have been declared ever since inception.no agms what kind of a company is it

  • Arnold

    This article should have been supported by reference to purported evidence or examples of incidences of actual abuse of the said funds. Where such reference is prohibited as contempt of legal process then a general but clear description would suffice.

    • pafunge

      Evidence is implicit…18m accumulated losses means depositors funds of at least that much were being used to fund operations as income was not able to cover the costs and borrowing has its own cost which still need to be covered.