BoZ receives Australian report on fading notes
 

Zambia Daily Mail

15.06.04

Bank of Zambia governor Caleb Fundanga has said the central bank has received a report from Australia on the fading polymer notes and measures would be effected soon to correct the situation.

Appearing before the Economic and Labour Affairs committee at Parliament in Lusaka yesterday, Dr Fundanga said the fading polymer notes are a set back to him and would not like to be associated with something that was bad.

He said a study to introduce polymer notes was conducted in 1999 and was approved in 2000 thereafter implemented last year in September.

Dr Fundanga said the study conducted in 1999 revealed that polymer notes were of high substance than paper.

He said the printing company attributed the problem to the quality of ink which was badly affected due to some technical fault.

Dr Fundanga also blamed the public for not handling the notes properly leading to their destruction.

And Zambia National Commercial Bank managing director Likolo Ndalamei has said the Bankers Association of Zambia (BAZ) is exploring ways of establishing a Credit Reference Bureau (CRB).

The CRB would detect and deter delinquent borrowers from further accessing loans based on their debt repayment culture.

Mr Ndalamei said banking institutions would greatly benefit from the CRB.

He said the debt delinquency culture has reached intolerable levels posing a threat to the sector if not checked.

Dr Fundanga said the CRB being spearheaded by the BAZ would have to be backed by an Act of Parliament for it to be effective.

He appealed to members of Parliament to support the motion to create the bureau when it comes for debate in Parliament because debt delinquency contributed to high interest rates.

Other factors attributed to high interest rates according to Dr Fundanga, are deficit expenditure and high appetite for borrowing by government though it was a lucrative business for commercial banks.

Dr Fundanga noted that a lot of money was borrowed from the Development Bank of Zambia, never paid back and borrowed from other banks a situation which was not good enough for economic growth as it contributed to high interest rates.

The governor also appealed to members of Parliament to desist from pressurising the Ministry of Finance and National Planing to fund un-budgeted for projects in their constituencies.

He informed the committee that a Financial Sector Development Plan aimed at boosting weak sections of the financial sector has been drafted and submitted to Cabinet.

"We have some sick financial institutions that should be turned around and some archaic laws need to revised," he said.