The Bank of Zambia has taken possession of Intermarket Banking corporation Zambia limited with immediate effect.This is according to to a press statement released o the media by Bank of Zambia Head of communications.
Intermarket Banking Corporation has become the first victim of the Bank of Zambia stringent capital adequacy requirement which has forced the bank to become insolvent.
The development has now forced the Central Bank to announce its takeover of Intermarket Banking Corporation.
In 2012, the PF Government raised the minimum capital requirement for both local and foreign commercial banks to K104 million from K12 million and K520 million, respectively.
But most banks especially foreign owned ones operating in Zambia have been struggling to meet the minimum capital requirement forcing some to alter their shareholding structures by incorporating local shareholders.
This has still not helped increase their liquidity status with some barely surviving.
Insiders have revealed that the Bank of Zambia senior management is meeting to consider the fate of two more banks whose balance sheet has deteriorated over the last few months.
According to a statement, the Bank of Zambia has determined that Intermarket Banking Corporation is insolvent and is not in a possession to meet its obligations as they fall due.
“The Bank of Zambia wishes to remind the general public that the decision to take over the affairs of Intermarket Banking Corporation, is intended to safeguard the interest of depositors and preserve the integrity of the financial sector,” the statement read.
The Central Bank announced that during this period of possession, the Bank of Zambia shall prepare a state of affairs and take any other action it deems fit.
Intermarket Banking Corporation was in March 2010 acquired by Afriland First Bank Group of Cameroun who took over 80 percent shareholding in the bank for an undisclosed sum of money.
Afriland also took 80% shareholding in Intermarket Securities, which is 100% owned by Intermarket Bank.Sabre Capital, the former majority shareholders in Intermarket Bank retained 20% ownership.
With Headquarters in Lusaka, the bank had seven branches across the country.