By MAYA NTANDA –
THE Bank of Zambia (BoZ) has taken possession of three financial service providers for allegedly being insolvent.
BoZ head of communications Kanguya Mayondi said Cetzam Financial Services Plc, Genesis Finance Limited and Commercial Leasing Zambia Limited, have been taken over with immediate effect.
Mr Mayondi said in a statement that BoZ has determined that the three financial service providers were capital insolvent.
The shareholders have failed to recapitalise the institutions and could not propose a recapitalisation plan acceptable to, and enter into an agreement with BoZ.
Further, the Board of Directors of the three institutions have been unable to resolve the deteriorating financial performance and conditions leaving BoZ with no option but to exercise its authority under the law.
This has been done in order to safeguard the interests of the public and provide for their orderly exit from the financial system.
“Cetzam Financial Services Plc, Genesis Finance Limited and Commercial Leasing Zambia limited are now under the possession of BOZ. During this period, BOZ shall prepare statements of affairs and take any other action it deems fit,” read the statement in part.
The action was conducted pursuant to section 81 of the Banking and Financial Services Act (BFSA) of the Laws of Zambia.
BoZ is empowered, under Section 81 of the BFSA to take possession of a financial service provider, where such a financial service provider refuses to comply with an order or directive.
The Act also allows BoZ to take possession where a financial service refuses to permit an inspection to be made as provided by the Act or obstructs an inspection and where the financial service provider is insolvent, among others.
BOZ has advised that all questions from depositors, creditors and other interested parties should be forwarded to the Director – Non Bank Financial Institution Supervision in Lusaka.