Sparks flew in parliament where former finance minister Tendai Biti clashed with Reserve Bank of Zimbabwe (RBZ) governor John Mangudya when he appeared before the Public Accounts Committee.
Biti, who is the Public Accounts parliamentary portfolio chairperson asked the Apex bank to release the list of names for all the beneficiaries of the Zimbabwe Asset Manangement Company (Zamco) loans.
Zamco took over all non-performing loans from the local banks during former president Robert Mugabe’s era and most of the beneficiaries are politically connected to Zanu PF.
Currently, ZAMCO has $1.13 billion in non-performing loans of which only $260 million has been repaid so far.
In a heated debate Biti argued that it was unconstitutional for a the RBZ to contract loans without Parliamentary approval.
Mangudya countered, and stated that the RBZ Act clearly says only ministerial consent is required.
“As the Reserve Bank, we cannot ask the Minister, upon receiving his consent, to go to Parliament. We are not accountable for that,” he said.
ZAMCO chief executive officer Cosmas Kanhai concurred with Mangudya and said it was breach of customer confidentiality to release the names.
Biti, however, maintained that it was unconstitutional and that ZAMCO was not a bank which was bound by confidentiality rules.
“Are you saying the RBZ Act is above the Constitution.
“We have powers as Parliament to demand that list. We are demanding it now, ZAMCO is not a bank”
Biti’s demands come amid allegations that only the companies connected to the political elite benefited.
RBZ lawyer Webster Madera also weighed in and revealed that the RBZ Act is subservient to the Constitution, but was quick to add that the central bank operates in terms of the RBZ Act.
In his response, Biti mocked Webster saying he was “his law student” and their (RBZ) actions are a complete negation of the law.
“ Those loans are illegal, they are not binding. Webster, you know
Mangudya insisted that ZAMCO was not a creation of the central bank.
Mangudya also threw brickbates at the former finance minister who said government abused RBZ overdraft facility by exceeding the statutory 20% of the previous year’s revenue.
“We’re all culpable, why does parliament pass the budget knowing fully well about the government’s deficit? Where do you think the money comes from?” Mangudya said.
He said ZAMCO was created to remove non-performing loans from bank balance sheets.
However, Biti did not budge in and he insisted that ZAMCO should hand over customer details to the Public Accounts Committee.
ZAMCO is an arm of the RBZ established in 2014 to alleviate banks from the pressures of excessive NPLs.
Its mandate is to resolve NPLs of banking institutions through their acquirement, restructuring and disposal.