On Wednesday Minister Biti told journalists there was no need to indigenise the banking sector as local banks already dominated the sector.
But Minister Kasukuwere retorted: “(Minister) Biti has no business talking about indigenisation of banks. At the appropriate time, we shall advise on the steps we are taking to indigenise the sector.
“Otherwise, we do not expect him to make any policy pronouncements on indigenisation. That’s not his domain.”
Foreign-owned firms operating in Zimbabwe are required in terms of the Indigenisation and Economic Empowerment Act to sell at least 51 percent stake to locals.
Minister Kasukuwere has in the past said when the mining sector had been fully indigenised, the focus would immediately shift to the financial sector.
But Minister Biti said since only four out of 26 banks were foreign-owned, there was no need to localise them and that locals interested in establishing banks could approach the relevant authorities for a banking licence.
Minister Biti said if a certain bank was valued at US$60 million and US$30 million would be required to buy a controlling shareholding and that means anyone with such an amount of money could start their own bank.
“If you have US$30 million you can start a bank, why go into Mr Brown’s bank? Out of 26 only four are foreign. It’s an indigenised sector. If you meet capital requirements we can give you a licence tomorrow,” he said.
He said banks had worked hard to rebuild their eroded capital base from a mere US$300 million at the beginning of 2009 to over US$4 billion now.
“Banks play an intermediary role and they are as good as their deposits. They are not at the centre of production, so you cannot apply the same position with Zimplats. If it is not broken do not fix it,” said Minister Biti.
There is fear in some quarters that indigenising foreign-owned banks could affect stability of the sector and warp the confidence that is returning from the crises caused by almost a decade of economic instability.
Foreign-owned banks operating in Zimbabwe include Standard Chartered Bank, Stanbic Bank, MBCA Bank and Barclays Bank.
But there has generally been concern over the reluctance of foreign-owned banks to extend lines of credit to productive sectors of the economy. Foreign-owned banks have remained extra cautious over the calibre of clients they lend to, mostly blue-chip firms and high net worth individuals. Government has viewed this as sabotaging a fragile economic recovery process considering that mostly firms from Western countries that unilaterally imposed economic sanctions on Zimbabwe control most of these banks.
While the foreign-owned banks were reluctant to support productive sectors of the economy and sitting on millions of deposits, local firms and other entrepreneurs were groaning from the spike of high interest rates.