By Isaac Zulu
Economic Front Fighters leader Kasonde Mwenda has attributed the decision by the Bank of Zambia to take over Investrust Bank to the Bank of Zambia’s reckless enactment of excessive increase in Statutory Reserve Ratio.
He charged that the collapse of three commercial banks under the watch of the UPND administration is not only a sign of economical mismanagement, but also a clear indication of a direct dire state of affairs in the country.
“In just two and half years of taking office, President Hakainde Hichilema’s UPND government has collapsed three local banks- Development Bank of Zambia (DBZ), Betternow Finance, and Investrust Bank. This collapse has grown out of reckless enactment of excessive increase in Statutory Reserve Ratio by the politically compromised Bank of Zambia-BOZ which out of political expediency removed money out of circulation and inevitably pushed three local banks into distress and insolvency. On November 13, 2023, the Bank of Zambia (BoZ) increased the Statutory Reserve Ratio (SRR) by 300 basis points to 14.5%. A week later, again in reckless desperation, on November 21, 2023, the Statutory Reserve Ratio (SRR) was increased by a further 250 basis points to 17 percent effective November 27, 2023. We must not ignore the fact that this is not the first time such a decision has been made,” Mwenda stated.
He stated that in February 2023, a similar increase in the Statutory Reserve Ratio of 2.5 percentage points to 11.5 percent was implemented.
He said despite the incessant warning against abuse of financial regulation instruments, the unadvisable UPND had unfortunately collapsed key Banking institutions in record time and this pointed to a worrying trend of financial instability that threatened the well-being of every Zambian citizen.
Mwenda stated that the recent repossession of three financial institutions – Development Bank of Zambia, Betternow Finance, and Investrust Bank – by the Bank of Zambia under the UPND government’s watch was not just a sign of economic mismanagement, but a clear indication of the dire state of affairs in the country.
He further stated that, instead of fostering growth and development, the government’s actions were leading to closures and distress in the financial sector.
“The thriving financial sector that once formed the backbone of Zambia’s economy is now crumbling under the weight of the UPND government’s misguided policies. Instead of fostering growth and development, the government’s actions are leading to closures and distress in the financial sector, leaving citizens stranded without the vital financial services they once relied on,” stated Kasonde.
He stated that as country witnessed the distress and closure of financial institutions, it was crucial to recognize the urgent need for change.
Mwenda stated that unless the UPND government took immediate and drastic action to rectify the damage caused by their economic mismanagement, citizens could only anticipate the continued and ongoing closures of more financial institutions in the future.
The opposition leader also stated that the dismal state of affairs demanded immediate attention and corrective action.
“Lest we see the complete collapse of the financial sector in Zambia under the watch of the UPND government,” stated Mwenda.
