RBZ tells NSSA to apply for building society licence

via RBZ tells NSSA to apply for building society licence October 29, 2014

THE Reserve Bank of Zimbabwe (RBZ) has told the National Social Security Authority (NSSA) to apply for a building society licence as it would take time to amend laws to give room for deposit-taking micro-finance institutions (MFIs).

Banking sources told NewsDay last week that RBZ has already communicated to NSSA on the new development.

“RBZ said it would take longer to amend the laws to allow for deposit-taking microfinance institutions. The current law prohibits MFIs to take deposits.

NSSA was told that it would be easier for them to apply for a building society licence since they want to embark on housing developments,” a source said.

The source added: “What this means is that NSSA’s bank can be allowed to operate while it works on complying with the minimum capital requirements.”

In June, NSSA applied for a micro-finance banking licence, saying it wanted to concentrate on housing construction.

The application for a micro-finance bank licence came barely a month after NSSA had surrendered the operating licence of its 84%-owned bank, Capital Bank, saying it was no longer willing to inject additional capital into the institution.

RBZ said Capital Bank had been operating in an unsafe and unsound financial condition characterised by critical under-capitalisation, persistent losses, chronic liquidity challenges and inordinately high levels of non- performing loans.

NSSA moved into the then ReNaissance Merchant Bank (RMB) in 2012 in a $24 million deal for 84% shareholding.

NSSA said at the time, it was swooping in on RMB as a gateway to First Mutual Holdings Limited (formerly Afre Corporation). RMB had 33% shareholding in Afre.

NSSA has interest in banks, insurance and properties. It has a 35,12% stake in FBC Holdings, the parent company of FBC Bank, 37,79% shareholding in ZB Financial Holdings that wholly owns ZB Bank, and 10% in CBZ Holdings.

The authority also has a controlling shareholding in hospitality concern Rainbow Tourism Group.

In its financial results for the year ended December 31 2013, NSSA said it paid out $148,9 million in benefits last year up from $115,7 million in the previous year.

Income from pension contributions went up 27% to $173,4 million from $136,3 million in 2012.