Time Bank of Zimbabwe Limited, the first locally owned commercial bank to be established in the country, is set to reopen soon its doors to the public, the bank’s owners said in a statement ahead of the scheduled resumption of operations.
“Standing the test of time, in order to deliver economic empowerment to both yourselves and ourselves through innovative banking services. An exciting time is coming. Watch the space for the latest on Time Bank,” the bank’s founders said.
Time Bank was licenced in 1997 and began operations the same year. Chris Wesley Takura Tande was the founder of Time Bank.
At that time there was no commercial bank, which was owned by local Zimbabweans. However, there were merchant banks and discount houses, which were owned by local Zimbabweans.
Time Bank managed to break new ground and established itself on the market.
The bank was very innovative in its business approach. Thereafter a number of commercial banks, which were locally owned, followed suit. However, in 2004 a number of banks were closed by the Reserve Bank of Zimbabwe (RBZ) for one reason or another, some which were hotly contested by the owners.
During that period Time Bank was also closed and had its banking licence cancelled, but disputed the reasons for its closure and cancellation of its licence. It was the first bank to take RBZ to court over its unlawful closure and cancellation of its licence.
There was then a period of protracted legal battles between the bank and RBZ. The legal battles went on for many years. However, later on as events unfolded it turned out that Time Bank had been closed unlawfully and also that its licence had been cancelled unlawfully by the central bank.
In fact, it became clear that the Reserve Bank had taken about US$5 million from Time Bank unlawfully before closing the bank and this created financial problems for Time Bank.
Time Bank requested the RBZ to refund the money and the former Governor of RBZ Dr Leornard Tsumba, agreed to refund the money but his term of office ended prematurely before he had overseen the return of the funds.
However, after Dr Gono Gono took over the reins as Governor of the RBZ, he allegedly reneged on the decision to refund such money to Time Bank, forcing the bank to apply to the courts to compel the central bank to refund the money in early 2004.
The RBZ responded by closing Time Bank and putting it under a disputed curator. “It appears Time Bank was punished for demanding its money back. During the period of curatorship RBZ then cancelled Time Bank’s licence in 2006 unlawfully,” a highly placed source said.
Time Bank then applied to court for the reinstatement of its licence and in 2009 the Court ruled that the bank’s licence be reinstated.
However, despite the reinstatement of its licence, Time Bank could not resume operations because the RBZ, under Dr G Gono, refused to hand over its assets, documents and affairs of Time Bank in the normal way at the end of curatorship, from the former Curator of Time Bank and RBZ to the Directors of Time Bank, because the RBZ and the former Curator of Time Bank could not account for all such assets and documents. This resulted in further legal disputes.
However, while such disputes were raging on, Time Bank made a unique decision which distinguished it from all the banks that were closed. Time Bank after the end of curatorship, under its directors and in terms of its business policies and values, made a decision to pay all its known depositors and employees their full amounts, in 2006 and that was at a time when the Zimbabwe Dollar still had some good value.
“Time Bank is probably the only bank in the banking history of Zimbabwe which managed to pay all such depositors and employees their full amounts without borrowing from RBZ or getting new money from its shareholders or from Deposit Protection Corporation or raising new deposits in order to pay old depositors,” a source said.
The source noted “this showed that the bank valued its clients and staff members despite the difficulties it was going through. It further showed that the bank despite its problems had enough financial resources to pay its creditors, hence such banks did not deserve to be closed”.
In 2015, the new Governor of reserve bank, Dr John Mangudya, after hearing both sides of the dispute, resolved the dispute between Time Bank and RBZ decisively and fairly.
In particular, the RBZ and Time Bank negotiated and entered into a settlement agreement under which the RBZ agreed to refund the US$5 million, which it had taken unlawfully from Time Bank before closing the bank Furthermore, the RBZ and Time Bank agreed on the procedures for the incomplete handover/ takeover of the assets and documents.
Notably, the decision of Dr Mangudya on the mentioned refund was the same decision, which the former Governor Dr Tsumba had reached earlier, but in between them Dr Gono had made a different decision on the matter.
Thereafter, the RBZ issued a notice to the public advising that Time Bank and RBZ had resolved all their legal disputes and that Time Bank can now operate. Following such Public notice Time Bank is now set to reopen.
From the experience of Time Bank it is clear that some of the banks which were closed by RBZ should not have been closed at all.