The Bank of Zambia has assumed control of two financial institutions, Development Bank of Zambia and Betternow Finance Company Limited, effective July 21, 2023. The decision was made due to regulatory violations and insolvency issues respectively, in a move aimed at safeguarding public interests and preserving the integrity of the financial system.
In the first instance, the Bank of Zambia exercised its authority under the Banking and Financial Services (Capital Adequacy) Regulations and took possession of Development Bank of Zambia, a non-deposit taking financial institution. Despite continuous efforts of engagement, the institution’s Board of Directors was unable to address the regulatory capital deficiency. Consequently, the Bank of Zambia stepped in to protect the public’s interests and uphold the financial system’s integrity.
Similarly, Betternow Finance Company Limited, another non-deposit taking financial institution, faced insolvency issues leading to the Bank of Zambia exercising its power under the Banking and Financial Services Act, 2017. Despite the Bank’s efforts to engage with the company, its financial performance and condition continued to deteriorate. To safeguard public interests and ensure an orderly resolution, the Bank of Zambia took possession of Betternow Finance Company Limited.
During the period of possession, the Bank of Zambia will conduct a thorough assessment of the assets and liabilities of both institutions. Additionally, the Bank will take any necessary actions as per the provisions of the relevant legislation.
The Bank of Zambia’s actions aim to protect the public’s trust in the financial sector and ensure that the nation’s financial institutions adhere to regulations and maintain financial stability. The public has been assured that the Bank of Zambia will diligently handle the affairs of the institutions and take necessary steps to address the challenges faced by both.