Zim CenBk Head Says Local Banks To Be Basel II Compliant In 2015

(IDEX Online) – Zimbabwe is pressing ahead with the adoption of Basel II with all banks expected to be fully compliant early next year.

The country's banks are expected to switch over to Basel II by the first quarter of next year as the Reserve Bank of Zimbabwe (RBZ) steps up measures to strengthen the banking sector, RBZ governor Dr John Mangudya said in his first monetary policy statement last week. He said the central bank will seek to establish a level of compliance next year.

“The Reserve Bank will conduct a final survey on the implementation progress during the quarter ending 30 September 2014 before banks go live using the Basel II compliant statutory returns beginning the first quarter of 2015,” The Herald newspaper cited him as saying.

“Banking institutions have made progress in implementing the revised capital framework. Observations made during on-going on-site examinations are that internal systems for banking institutions are showing greater stability as banks continue to upgrade their systems.

“However, the Reserve Bank noted the need for banks to involve independent review units such as internal auditors as well as external auditors in the validation of the Basel II related systems and processes,” Dr Mangudya said.

The Basel banking regulations which are used to regulate finance and banking internationally.

The latest accords, Basel III, aims to strengthen bank capital requirements by increasing bank liquidity and decreasing bank leverage.

The RBZ has adopted a gradual approach to Basel II implementation in order to allow for a smooth transition from the current system to the new approaches, the report added.