Lusaka Times, December 24, 2010
Consumer Unity Trust Society (CUTS) International Zambia has asked the Bank of Zambia (BoZ) to explain why it appointed FirstRand financial-services group to run Finance Bank when the South African Bank has a subsidiary in Zambia which is a competitor in the sector.
CUTS International Zambia Board Chairperson Love Mtesa said although the Central Bank had the jurisdiction to take action against any failing financial institution in Zambia, appointing a rival Bank to manage the affairs of another like Finance Bank was wrong.
Mr. Mtesa said chances that FirstRand Ltd would make fair management decisions at Finance Bank were minimal because the South African Bank had vested interests in the banking sector in Zambia.
He asked BoZ to give an explanation on the matter and urged the Central Bank to monitor the situation at Finance Bank in order to boost customer confidence.
FirstRand Ltd, South Africa’s second-largest financial-services group was contracted by BoZ to run Finance Bank Zambia Ltd.
The Central Bank has since commenced legal action against Finance Bank shareholders who it says are responsible for the ‘downfall’ of the bank due to poor management.
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