Government has hiked the amount of money investors must deposit with the Bank of Zambia if they want to establish a commercial bank, Mr Chikwanda said at the same function.
“The minimum capital requirement will rise from K12 billion to K104 billion for local commercial banks while foreign commercial banks will pay K520 billion,” he said.
Mr Chikwanda hopes that the measure will mobilise additional resources to enable banks to participate effectively in national economic growth and provide more money for credit.
The increase will also make the banks more resilient to economic shocks, Mr Chikwanda said.
Zambia has up to 18 registered and operational commercial banks, according to the Bank of Zambia website.
On the increase of the minimum capital requirement threshold for local commercial banks, Mr Dodia said the move will strengthen the financial base of the banks, thereby safeguard the interest of depositors.
“What the increase does is that banks will have to invest more in the economy, hence making the financial base stronger and safer for depositors,” he said.
He said the minimum capital requirement for banks from K12 billion to K104 billion will create stiffer competition and banks with weaker financial muscle will be disadvantaged, leading to the closure of some banks.
He said the few that may survive could offer compromised services.
[Zambia Daily Mail]
Only time will tell.
nice move….utuntemba twama banks twaibila sana abena zambia indalama ( briefcase banks have stolen too much money from the zedians)…….
NEW NOTES LIKELY TO HAVE KAUNDA AND MWANAWASAS’ PORTRAITS. IM SURE SATA WANTS HIS TOO, IN FUTURE. THOSE OF YOU WHO THOUGHT DROPPING OFF ZEROS WILL GIVE YOU PROUD IN DEALING WITH YOU FOREIGN FRIENDS. NOW THEY WILL LAUGH AT THE THREE UGLY HEADS. KE KE KE KE KE KE KE KE
I support GRZ’s move. Everyone wants to come and make easy money here to externalise their profits. I am in a developed count which has few commercial banks yet the country has a rich economy.
Wasn’t it just a few months ago that govt reduced minimum capital requirements telling us this would make credit more affordable and help small businesses to grow – i.e. as part of the “more money in your pocket” plan?
good move as before any Tom sick and Harry could open a bank. this move protects the clients and workers if the bank goes bankrupt
…it also means that Investrust, Cavmont, Intermarket and UBA should merge. Access, First Alliance, Intercontinental Bank and Ecobank can do the same.
Mo manneh!!!!
It will not bring benefits. The only benefit it will bring is for u to say K50.00 instead of saying K50,000.00. It will cost us more money. to print notes and coins . The coins ar a bit cumbersome to handle.Please note Kaponya economics does not produce value?? just kulumana tyila. no value addition. more mone in the printers pockets. and no money even in the kaponyas. that is the net effect.
the reduced on corporate tax for banks to 35%. This move is good as a local Zambians we shall benefit. This will lead to economic growth you will see..
Very very good move!
I see a number of Zambians losing Jobs, some banks won manage this capital requirement, I hope the minister will be gracious enough to allow an extended grace period. Its now 9 times more dificult for Zambians to start-up banks, some of the existing banks will now have to merger and restructure meaning loss of Jobs.
Good move! We don’t want people thinking they can just come and set up banks in our country and plunder from us! Well done MCS!
This is an incredibly lousy move on the part of BoZ. Raising the minimum capital at a time you are trying to get banks to reduce lending rates does not make sense. The banks are being asked to tie up K104bn in non interest bearing assets. This is a huge opportunity cost to banks and any person with a little business sense can see that this is a bad move. BoZ needs an economist running it, not this man who just wakes up and makes to shocking announcements within hours of each other!
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