Home Southern Africa Zambian Government Pledges K1 Billion to Shore Up Depositors’ Confidence Investrust...

Zambian Government Pledges K1 Billion to Shore Up Depositors’ Confidence Investrust Bank in -Possession

40
Zambian Government Pledges K1 Billion to Shore Up Depositors’ Confidence Investrust Bank in -Possession

(3 Minutes Read)

At the point of taking over the bank, it had an estimated insolvency rate of K850 million. In addition, Investrust Bank-in-Possession had pre-existing liquidity challenges that became serious in recent months, thereby compelling it to resort to expensive short-term funding sources

The Zambian government has pledged K1 billion in support to Investrust Bank-in Possession to ensure that depositors do not lose their money. Bank of Zambia (BOZ) Governor Denny Kalyalya said the Central Bank requested government support in paying out depositors of the Investrust bank – in Possession to protect the integrity and stability of the financial sector.

Dr Kalyalya disclosed that at the point of taking over the bank, it had an estimated insolvency rate of K850 million. In addition, Investrust Bank-in-Possession had pre-existing liquidity challenges which became serious in recent months, thereby compelling it to resort to the expensive short-term funding sources, he explained.

Dr Kalyalya explained that what was asked of the government is K1 billion support as a buffer as it is a tentative number that may go down once the Statement of Affairs has been concluded.

Dr Kalyalya explained that when licensing an institution to operate as a bank, BOZ expectation is that the institution being licensed must succeed in playing its role of providing financial services to its clients and the economy at large.
In order to clear the misconception surrounding the possession of Investrust Bank, he cited the amended 2020 BOZ Act which provides no timeframe for the preparation of the Statement of Affairs.

Dr Kalyalya assured the depositors that their deposits were safe as the government would provide support to bridge the gap between the assets and liabilities of Investrust-in-Possession.

Read Also;

https://trendsnafrica.com/zambia-reaches-debt-deal-with-private-creditors/

Meanwhile, Deputy Governor Operations Francis Chipimo narrated that the possession process involved sending staff to all the 20 branches of Investrust-in-Possession, located in six provinces including the head office to verify monies held by the branches and secure the important documents and assets.