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CONFIDENCE in the banking sector is set to increase in 2015 at the back of various initiatives the Reserve bank of Zimbabwe is considering in a bid to restore stability in the sector, John Mangudya said.

Mangudya said the central bank has earmarked 2015 for development and transformation of the banking sector.

“We have been working on a one on one basis with the struggling banks and we are certain next year the sector will be stable. Banking sector stability will improve next year as we are looking into various initiatives that will restore confidence in the sector. We are aware of suspicious transactions resulting in illicit flows of cash out of the country. We are monitoring the illicit deals and will next year impeach the suspects” he said.

Meanwhile, Mangudya added that the bond coins which have already began circulating will not exceed US$50 million at least in the next three years until economic fundamentals are right.

“Bond coins will not go beyond the US$50 million facility and the ratio will be maintained at one percent” he said. Mangudya said the imported bond coins are not increasing liquidity but completing the US dollar in smaller denominations.

“We are improving change in small denominations which was the missing link in this economy. We are now expecting to see price corrections.”

Already $10 million worth of bond coins have been disbursed to banks. Mangudya has said the bond issue has been a process which started in 2009 and is only manifesting today. The coins are being distributed in denominations of 1c, 5c, 10c and 25c while the 50c will be introduced later next year.

Although some sections of the banking sector have been aocating for credit cards, the situation on the ground reveals that less than 90 percent use the facility. – Michael GwarisaThe Business Connect

Source : Financial Gazette