Published: 23 January 2014

FINANCE and Economic Development Minister Patrick Chinamasa yesterday said local financial institutions were in a sound state despite the liquidity crunch that has affected some of the banks.

Minister Chinamasa said this while responding to questions from Kambuzuma legislator Mr Willas Madzimure (MDC-T) in the National Assembly yesterday.

"I want to put it on record that the banking sector is not sick. We have 21 banks and of those, three had challenges of liquidity," he said.

He said the liquidity challenges did not mean the institutions were facing viability problems.

"Banks lend on the premise that not everyone will come and demand their money at the same time. In this instance, the three banks were caught with their pants down where the assumption on which they lend did not work.

"But as we speak they are still standing and we will do everything in our powers to see to it that they remain standing," he said.

A number of banks had problems in dispensing cash to their customers over the festive season due to the liquidity crunch that has gripped the economy.

Meanwhile, Agriculture, Irrigation, Development and Mechanisation Minister Dr Joseph Made said it was not Government policy to announce pre-planting maize producer prices.

He was responding to a question by Mutasa South representative Irene Zindi (Zanu-PF) on why Government did not announce the price at the onset of the farming season.

"The policy is clear, I have not reneged on announcing the maize producer price.  The producer price is announced at the end of the season," said Dr Made.
- herald

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