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Tuesday, July 7, 2020

Green Party calls on government to protect Intermarket bank depositors

General News Green Party calls on government to protect Intermarket bank depositors

Customers line up outside Intermarket banking corporation branch at Farmers house
Customers line up outside Intermarket banking corporation branch at Farmers house

The Green Party has said it is extremely disappointed that Government and Bank of Zambia (BOZ) failed to intervene to avert the closure of Intermarket Bank.Green Party president Peter Sinkamba said it is disappointing that Government failed to put in place measures to ring-fence domestic deposits especially vulnerable depositors to protect them from undue suffering.

“We are very disappointed that BOZ failed to put in place measures that make the institution as a lender of last resort. We are also disappointed that government has failed to come up with measures to intervene in such situations by moving in protect holders of domestic deposits, especially workers, pensioners, marketeers and other vulnerable depositors so that they enjoy uninterrupted access to their accounts even if a bank is facing statutory challenges, as the case is for Intermarket Bank. This is what caring governments have done elsewhere to protect domestic depositors,”

Mr.Sinkamba said failure by Government and BOZ to put in place intervention measure has seriously exposed smaller banks to the risk of bank runs. He said he foresees a situation where pensioners, marketeers and other vulnerable depositors will lose confidence in the banking system, especially banking with smaller banks, the majority of whom are indigenous.

Mr.Sinkamba said as a consequence, he foresees mass-migration of depositors from smaller banks to bigger and stronger banks thereby crowding indigenous banks out of the market. In another extreme, he said, he also foresees a situation whereby small-scale traders will resent banking altogether, and rather opt to keep their money home. Both scenarios are not healthy for the financial and economic sector of an emerging country like Zambia.

He called upon Government to immediately put in place measures that will ring-fence domestic depositors. Mr.Sinkamba said there is absolutely no justifiable excuse for Government and BOZ to fail to put in place such compulsory measures 52 years after independence.

Meanwhile, Economist Professor Oliver Saasa warned that small banks in Zambia also risked being taken over by the Central Bank because of liquidity challenges.He however said that there was nothing to worry about following the closure of Intermarket Bank because the financial institution would open soon as BOZ was smoothening things.

He explained that this was not the first time that the Central Bank was taking over operations of a bank that was insolvent and that they had taken over banks in the past and ironed out crises. He assured the public that the Central Bank also monitored the operations of all banks in the country and that it was capable of running any of them if they collapsed.

Prof. Saasa said that the temporary closure of Intermarket Bank was done to protect depositors, whom he said would have been rushing to deposit more money if they thought the situation was stable. “Closing a bank is done to protect depositors because they put a lot of money when they think everything is alright. It also protects other banks transacting with it through overnight lending, banks lend each other money,” he said. Prof. Saasa reiterated that closing a bank was the last resort for the Central Bank and that above all it tried to correct the situation.

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  1. The PF bandits can’t protect Intermarket bank depositors b’coz they are the ones who made bankrupt.
    Invest Trust Bank is next to be shut down in a month time. You have been warned. Wasting time with the incompetent PF bandits of visionless Lungu.
    The Skeleton Key
    ~206~ has spoken facts.

    • After Invest Bank PLC, the following banks are held captive on their “throats of mwamoneni” nomba & will be shut down soon due to PF’s corrupt incompetence.
      ~AB Bank
      ~Banc ABC
      ~Cavmont Bank
      ~First Capital Bank
      ~Access Bank
      ~First Alliance Bank &
      ~Eco Bank.
      Under PF all breaks down!
      The Skeleton Key

  2. Dream on skeleton everyone knew Inter market was doomed once sold off to those people without due diligence they have been looking to sale ever since their myopic plan was to buy cheap sell expensive hence no investment whatsoever now they have the bank on its knees the other banks you mention are not in a similar position

    • Actually Susan they are. Most recorded from -140% to 0% profit. In other words, all these banks made losses & will be closed in the order above.
      Take it or leave it, it shall come to pass.
      The Skeleton Key

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