THE Reserve Bank of Zimbabwe (RBZ) has given Time Bank of Zimbabwe Limited the green light to re-open, 18 years after it was closed unlawfully by the central bank in 2004, during the time of governor Gideon Gono.

In a public notice on Tuesday, the RBZ said: “It is hereby notified that Time Bank of Zimbabwe Limited has been authorised to conduct limited banking activities in terms of the Banking Act … following a pre-opening inspection of the institution’s readiness to commence banking business”

A pre-opening inspection is a rigorous exercise done by the regulator of ensuring that everything is in order before it is allowed to operate.

“Having regard to the institution’s risk management structures and processes, level of capitalisation, corporate governance arrangements, its business plan and the Banking Act, Time Bank has been authorised to conduct limited banking activities and shall not be taking deposits from the public.”

Time Bank has been allowed to operate a new business model whereby the bank would not start by taking deposits, as is usually done by commercial banks.

A spokesperson of Time Bank yesterday said: “We appreciate RBZ’s authorisation for Time Bank to re-commence banking activities. The business model of lending without taking deposits is Time Bank’s initiative which was approved by RBZ as part of the pre-opening inspection.

“Such business model was not imposed on us by RBZ.

“Time Bank will issue a public statement next week advising our date for starting such banking activities.”

The bank announced last year, before the pre-opening inspection, that under its business plan, it would begin by lending without taking deposits.

In a statement issued at the time, the Chris Takura Tande-founded and led institution said it would introduce four new loan facilities — mortgage loans, loan facilities for exporters, loans for the payment of compensation to both previous farm-owners (PFOs) and other groups of Zimbabweans who also deserve payment of compensation.

However, Time Bank could not introduce such loan facilities before it had been authorised to operate. Time Bank has said it would focus more on investment banking activities.

The bank began operations in 1997, becoming the first locally owned indigenous commercial bank. Other locally owned merchant banks and discount houses were to follow years later into commercial banking.

Time Bank was closed in 2004 and its licence was cancelled in 2006 by the central bank.  Time Bank disputed the reasons for its closure and cancellation of its licence, and was the first bank to take RBZ to the courts.

The protracted legal battle unearthed that the bank was owed US$5m by RBZ before its closure which created financial problems for the bank.

The then RBZ governor Leonard Tsumba agreed to refund the money to the bank, but his term of office ended before the funds could be refunded.

His successor Gono was accused of having reneged in refunding the bank, which forced it to approach the courts.

RBZ responded by putting the bank under a disputed curator in 2004 and cancelled the licence two years later.

After cancellation of its licence, the RBZ tried to put Time Bank into Zimbabwe Allied Banking Group, but it successfully objected.

Also after the end of curatorship, Time Bank in 2006 and 2007 paid all its depositors their full deposits and its staff members their full salaries and terminal benefits without borrowing from RBZ or without new money from its shareholders or the Deposit Protection Corporation. – Daily News