31 January 2013

Zambia: BOZ Defends Kwacha Notes

THE new Kwacha notes are durable and the people who are deliberately soiling them or subjecting them to harsh handling as a way of testing their durability should immediately stop, Bank of Zambia (BoZ) governor Michael Gondwe has said.

Dr Gondwe said in Ndola yesterday that it was important for members of the public to be mindful that all bank notes have limited lifespan which was largely determined by how the public handled them.

Dr Gondwe said during the official opening of the Indo-Zambia Bank, Ndola Jacaranda Mall Agency and the inauguration of the refurbished Ndola Branch, that BoZ had put in place a Clean Banknote Policy, which encourages the proper handling of bank notes.

"The Central Bank, therefore, wishes to advise members of the public not to subject the banknotes to harsh handling or indeed experimentation. We expect that members of the public will ensure that banknotes are handled in a proper manner to preserve their lifespan," he said.

He added that unlike banknotes, coins have a much longer lifespan and were convenient for lower value transactions and change purposes.

Dr Gondwe said the Central Bank increased the minimum capital requirement for banks to K520 billion and 104 billion for foreign and local banks, respectively, in its quest to ensure the financial sector played an active role in financing the productive sector of the economy.

Speaking earlier, Indo-Zambia Bank, managing director Shankardas Gupta said the bank was solid commanding strong financial fundamentals with high net worth, high capital adequacy ratio.

He said Indo-Zambia's total business mix was now in excess of KR 2.1 billion (US$4 billion), while the total deposits rose to KR 1.2 billion (US$2.3 billion) with the loans and advance portfolio crossing the level KR850 million (US$160 million).

"The success of Indo-Zambia Bank can be attributed to our very strong parentage and valuable support of the governments of Zambia and India through the three shareholding banks of international repute.

"Together, these shareholding banks impart unmatched strength to our bank as their combined balance sheet size is over US$200 billion," Mr Gupta said.

He said apart from their strong network in India, they have a global branch network spread across 30 countries at all their major international financial centres of the world.

Indo-Zambia Bank which was formed in 1984 by the governments of Zambia and India to step up modern banking and garner savings of the community and use the resources for social good, now has 17 branches across the country, which will increase to 22 and four agencies soon.

Indo-Zambia board chairperson Orlean Moyo said the Government's maintaining and sustaining of stable macro-economic environment was responsible for the bank's expansion programme and the current vibrancy being experienced by the Zambian economy.

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