BOZ challenged on engagement of FirstRand Group

Consumer Unity and Trust Society (CUTS) International has asked the Bank of Zambia to clarify the reasons behind the appointment of FirstRand Group to manage the operations of Finance Bank Limited on its behalf when the group has a subsidiary in Zambia which is a competitor.

CUTS board chairperson Ambassador Love Mtesa says the Agent appointed, being a competitor with vested interest in the Zambian banking sector raises questions.

He says it is clear knowledge that First National Bank FNB, which has branches in Zambia, is a subsidiary of FirstRand Group, and the largest contributor of the Group’s bottom line.

He states that the competitor is managing the affairs of another rival company adding that this has implications on the bank’s future.

Ambassador Mtesa also says that competition in the sector will be affected as the chances of a competitor providing fair and accurate leadership without ill intentions are minimal.

He further says that it is also important for the Central Bank to be vigilant by ensuring that confidence among the customers is maintained and guaranteed as earlier indicated.

He states that CUTS has observed that there has been a run on Finance bank which needs immediate attention Ambassador Mtesa says the triggered bank run and the potential erosion of confidence in banking will have in the short run liquidity implications, increase interbank lending rates which may ultimately be passed on to consumers.

He says this is evident by the reported sudden jump in the interbank lending rates from 2.5 percent to 10 percent over this period.

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