Closing of banks; whats wrong with our economy?

zimbabwe's old bank notes (picture from online source)

ZIMBABWE’S banking sector has been through tough times due to a generally tough economic environment as some top banks  lost their operating licences, AfrAsia bank formely known as Kingdom is among those banks.

 The country central bank has since the introduction of the multiple currency regime in 2009 put a number of banks under curator ship, amid hopes the financial institutions could be saved, but it has resulted in the majority slipping into liquidation. In November last year, Tetrad Investment Bank was suspended by the Reserve Bank of Zimbabwe (RBZ) from undertaking banking activities after failing to secure investors to turn its fortunes At the end of last year five of the country's 26 banks did not have the minimum capital required by law, as top economic analysts reported.

In  November 2013 the Reserve Bank of Zimbabwe (RBZ) document gleaned by business digest indicated seven out of the 21 licensed banks excluding POSB were facing challenges and are the subjects of close central bank monitoring under the Troubled and Insolvent Bank Policy.

one of Zimbabwe's old bank (picture from online source)

Zimbabwe’s 26 banking institutions include 17 commercial banks, four merchant banks, four building societies and one savings bank. Of these, only foreign-owned banks, British-owned Barclays and Standard Chartered Bank, Standard Bank ’s subsidiary Stanbic, Nedbank ’s MBCA, Togo-based Ecobank, and CABS, a subsidiary of Old Mutual, are strong, with a combined deposit base of more than $1bn.

Local banks are struggling due to poor economic performance, tight liquidity conditions, limited lines of credit and low savings