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proper operational modalities.
In a statement issued last Friday, the RBZ said Barbican Bank was no longer a banking institution, but simply a registered company in terms of the law, after its registration was revoked with effect from February 25, 2013.

“As a consequence of the said cancellation, Barbican 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,” the RBZ said.

Members have since been warned against undertaking any banking transactions with the de-registered bank as they would be doing so at their own risk.

The RBZ had re-issued Barbican Bank with a banking licence in September 2012, but the bank failed to start operations in the stipulated 12 months, due to capital constraints, absence of risk management and corporate governance structures necessary for conducting banking business.

On November 22, 2011 the Registrar of Banks issued a notice of intention to cancel Barbican Bank’s licence, but the bank appealed to the Minister of Finance. The minister gave the bank up to July 31 to start operations.

After the bank failed to raise the requisite capital to start operations, the Minister of Finance upheld the RBZ’s decision to cancel the bank’s registration.

The Professor Mthuli Ncube-founded bank was part of the Zimbabwe Allied Banking Group formed in 2003 following the turmoil that rocked the banking sector.

The bank was amalgamated into ZABG, together with Trust Bank and Royal Bank, after it had succumbed to the liquidity crunch that rocked banks in 2003. Of the three banks, only Trust survives today, while ZABG, renamed Allied Bank, managed to remain a corporate entity after the demerger of Trust and Barbican.

Royal Bank is set for liquidation after failing to raise the initial regulatory minimum capital thresholds for commercial banking institutions of US$12,5 million.

Barbican failed completely to raise the requisite US$12,5 million initial minimum capital required to start banking operations on dollarisation in 2009.

The three banks were part of the more than a dozen banking institutions that succumbed to the rigours of tight liquidity that caused the 2003 banking crisis.

But after the institutions were integrated into ZABG, they contested their incorporation, arguing that they were still viable when they were amalgamated.

But the ghost of failure revisited the institution once again and the lifeline has slipped away.
Companies in Zimbabwe have generally struggled to raise capital to fund their business and those in the banking sector have not been spared the wrath of the liquidity crisis.

It was always going to be difficult for local banking institutions without strong foreign partners to consistently meet phased regulatory minimum thresholds which were recently increased to US$100 million by June 2014.