BUSINESS REPORTER
The Reserve Bank of Zimbabwe (RBZ) has given Time Bank the nod to resume operations, 16 years after the first locally owned commercial bank had its licence revoked by the regulator.
In a notice on Tuesday, RBZ said it had approved the institution to conduct limited banking activities following a pre-opening inspection of the institution’s readiness to commence banking activities.
“Having regard to the institution’s risk management structures and processes, level of capitalisation, corporate governance arrangements, its business plan and the Banking Act, Time Bank has authorised to conduct limited banking activities and shall not be taking deposits,” RBZ said.
Time Bank has said it would focus more on investment banking activities.
Founded by Chris Tande, Time Bank began operations in 1997 becoming the first locally owned commercial bank. Other locals owned merchant banks and discount houses were to follow years later.
But the bank was closed in 2004 by the central bank. Time Bank disputed the reasons for its closure and cancellation of its licence and was the first bank to take RBZ to the courts.
The protracted legal battle unearthed that the bank was owed US$5m by RBZ, which created financial problems for the bank.
Then governor Leonard Tsumba agreed to refund the money but his term of office ended before the funds could be refunded.
His predecessor Gideon Gono was accused of having reneged in repaying the bank, which forced Time Bank to approach the courts.
RBZ responded by putting the bank under a curator in 2004 and cancelled the licence two years later.
The courts restored the licence in 2009 but the bank could not operate, as RBZ could not do a hand over of the assets, documents and affairs of Time Bank in the normal way at the end of curatorship, from the former curator to the bank’s directors.
Another legal battle ensued.
However, while the dispute was raging on, Time Bank paid out all its known depositors and employees their full amounts in 2006.
RBZ governor John Mangudya resolved the dispute in 2015 when RBZ and Time Bank negotiated and entered into a settlement agreement under which RBZ agreed to refund the US$5m, which had been taken from the institution before it was closed.
