There were emotional scenes at Intermarket Banking Corporation branch at Farmers House in Lusaka on Wednesday a day after the Bank of Zambia closed the commercial bank.
Angry depositors started queening up around 07 Hours in the hope that the bank will open and allow them to make withdrawals and close their accounts.
A check at the Farmers House branch along Cairo Road found a heavy presence of armed police and the ATM machines non-operational.
Some of the affected customers interviewed complained that the Bank of Zambia should have allowed them to close their accounts before shutting down the bank.
Amos Shashi, a farmer from Katuba area complained that he has K500,000 locked in Intermarket Bank which he had planned to use partly for his farming activities in this farming season.
“I had put all my savings here (pointing at the bank’s door) but I am told that BoZ will only tell us the fate of our money after three months, now for me that would be too late because that means I will not do anything at my farm, I will not even pay my workers,” Mr Shashi lamented.
Intermarket’s chief executive, Jon Gudmundsson refused to comment.
On Tuesday, the Bank of Zambia took over Intermarket Banking Corporation citing the bank’s failure to meet financial obligations and seized its assets with immediate effect.
According to an official notice of possession, Bank of Zambia deputy governor for operations Dr Bwalya Ng’andu said the central bank has taken possession of Intermarket after the company failed to meet its obligations.
“Notice is hereby given that pursuant to Section 81 of the Banking and Financial Services Act, Chapter 387 of the Laws of Zambia, the Bank of Zambia has taken possession of Intermarket Banking Corporation Zambia Limited with immediate effect,” read the notice signed by Dr Ng’andu on Monday.
“The action to take possession of Intermarket Banking Corporation Zambia Limited is due to the bank’s insolvency and its inability to meet obligations as they fall due. During this period of possession, the Bank of Zambia shall cause to be prepared a statement of affairs and take any other action it deems fit.”
The central bank’s move to repossess Intermarket follows several other cases of insolvency experienced by other firms within the financial services industry.
In May this year, the central bank also took over the running of three insolvent indigenous financial institutions – Cetzam Financial Services, Commercial Leasing Zambia Limited and Genesis Finance Limited.
At the time, the BoZ stated that the three financial institutions were capital insolvent and their shareholders had failed to carry out recapitalisation and could not propose any plan acceptable to, and enter into an agreement with, the central bank.