ZANU PF MPs secured immunity for the Reserve Bank governor and his staff after the House of Assembly approved this week amendments to a Bill to reform the central bank. Reserve Bank governor Gideon Gono has repeatedly pushed for immunity.

According to a report on the amendments to the banking laws of Zimbabwe carried out before the inclusive government, a panel of experts chaired by Justice George Smith recommended that the constitution should confer immunity for the governor or his deputy for all acts done in good faith in his or her official capacity.

The team, which also included former central bank governor of Zambia David Phiri, South African retired judge and corporate governance guru Mervyn King and prominent lawyer Edwin Manikai, said the governor or deputy should be guaranteed security of tenure.

However, Finance Minister Tendai Biti in an interview yesterday downplayed the issue of immunity in the Reserve Bank Amendment Bill, saying it did not cover where there has been theft, fraud or a breach of the law.

"The Bill is not a malicious piece of legislation and there was no witch-hunt against anyone. The immunity in the Bill that is given to the officials stated is the kind of immunity that is to be found in most laws," he said.

"The new provision in the Bill simply says those officials who acted in good faith and without negligence will not be liable to prosecution. It does not say anywhere that where there has been theft, fraud or where there has been a breach of the law, the people should not be prosecuted."

Biti said in this respect, therefore, in many ways the provision on immunity is "superfluous."

One of the amendments pushed for by Zanu PF states that with effect from August 13 1999 "no claim shall lie against the state, the minister, the bank, the board, the governor or any employee of the bank for anything done in good faith and without negligence under the powers conferred by this Act".

The immunity also covers former RBZ governor Leonard Tsumba.

The decision to include the amendments came after Zanu PF MPs threatened to block the Bill which they criticised for granting "excessive powers" to the Finance minister and for being "personal".

On plans to force the Reserve Bank to surrender its subsidiaries, the Finance minister agreed that the companies would remain with the RBZ and could be disposed of with the consent of the minister.

Initially the MDC-T minister wanted to force the Reserve Bank to surrender its companies to their parent ministries in a quest to stop the bank from pursuing quasi-fiscal activities.

The Reserve Bank through the Finance Trust of Zimbabwe has a controlling stake in Carslone Enterprises, Fiscorp, Homelink (Pvt) Ltd and Zimbabwe Stock Exchange-listed Tractive Power and Astra Holdings.

"No shares or any assets of a company referred to in (1) shall be sold by the bank except with the leave of the minister responsible for Finance, and where such leave is given, the bank shall first apply the proceeds thereof to meeting on a pro rata basis any liability of the bank towards banking institutions arising from the deficiency, if any, that, on the date of commencement of this Act is found to exist between the total minimum reserve balances deposited by banking institutions on or before that date with the bank in compliance with Section 30 of the Banking Act."

The central bank governor would continue to chair the RBZ board but Biti proposed to cut to two deputy governers from the four catered for under the current law.

MPs pushed through amendments that changed sections of the Bill on the audit committee. Biti agreed to change the audit committee to the Audit and Oversight Committee which would be chaired by "a person employed in the Ministry of Finance appointed by the minister".

The new committee according to the amendments to the Bill would review the operations of the central bank to ensure that they are conducted in compliance with best corporate practice.

Biti also climbed down on the appointment of Finance permanent secretary into the board and accepted many other Zanu PF amendments. The Bill faces further scrutiny in senate.