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The Central Bank has taken control of a state-owned Development Bank of Zambia (DBZ) with effect July 21, 2023.
This, it said, was in a move to safeguard the interests of the public and protect the integrity of the financial system.
DBZ is a national development finance institution, regulated by Bank of Zambia (BoZ), supervised by the Ministry of Finance and mandated by government to provide financial and non-financial solutions to enhance economic growth in the country.
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BoZ Assistant Director-Communications, Besnat Mwanza, said Friday that they had taken possession of DBZ, due to non-compliance with the Banking and Financial Services (Capital Adequacy) Regulations.
Mwanza further said that the Bank of Zambia had determined that the Development Bank of Zambia was under capitalised.
She said in a statement that they had been unable to resolve the regulatory capital deficiency of the institution, despite consistent engagements by BoZ, shareholders and the Board of Directors of DBZ.
“For this reason, the Bank of Zambia has exercised its authority under the law in order to safeguard the interests of the public and protect the integrity of the financial System.
“Development Bank of Zambia is now under the possession of the Bank of Zambia. During the
period of possession, the Bank of Zambia shall cause to prepare a statement of affairs of the assets and liabilities of the institution and take any other action it deems fit in accordance with the
provisions of the Banking and Financial Services Act, 2017,” Mwanza said.
DBZ is a non-deposits taking financial institution, which was established in 1972 as a joint venture between the government, Public Sector Financial Institutions, local private sector and foriegn institutions.
In another related development, the Central Bank has also taken possession of Betternow Finance Company, a non-deposit taking financial institution, with effect July 21, 2023 due to its insolvency.
Mwanza said BoZ had determined that Betternow Finance Company Limited was insolvent.
She said despite consistent engagements by the Bank of Zambia, the Board of Directors of Betternow Finance Company Limited had been unable to resolve the deteriorating financial performance and condition of the institution.
“For this reason, the Bank of Zambia has exercised
its authority under the law to safeguard the interests of the public and provide for its orderly resolution,” Mwanza said.
She explained that during the period of possession, the Bank of Zambia shall cause to prepare a statement of affairs of the assets and liabilities of the institution and take any other action it deems fit in accordance with the provisions of the Banking and Financial Services Act, 2017.
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