Zimbabwe's Central Bank has closed down one of the country's oldest building societies, leaving tens of thousands of depositors uncertain about the status of their money. The building society is the most significant financial institution to be closed since the Central Bank pledged economic reforms last December.
The Intermarket Building Society has been lending money to homebuyers for more than 50 years. It has branches all over Zimbabwe and is a major processor of salary deposits for civil servants, in particular teachers. The Central Bank closed the Society on Monday, and lines of people formed outside its main branch in central Harare.
Several people in the line, although reluctant to talk to reporters, said they were trying to access their salaries. Others said they are due to be paid on Friday and wanted to speak to company officials to find out if alternate arrangements have been made. They got no answers because no one from Intermarket was in the office and its telephones went unanswered through Tuesday.
The Central Bank says it has placed Intermarket Building Society under the control of a special curator to protect depositers' money, and that it hopes to be able to sort out the company's problems as soon as possible.
Experts say Intermarket, like many banks, appears to have loaned large sums of money to speculators, rather than putting it into safer investments. With interest rates now between 250 and 300 percent, the speculators cannot repay the loans.
As part of its reform drive designed in part to crack down on currency speculation, the Central Bank has closed at least two asset management companies in the last three months, and some of their executives now face accusations of massive fraud. Several other banks have been forced to lower interest rates. But Intermarket is the first major consumer bank to have its doors closed.
Many Zimbabwean banks are in trouble due to the plunging economy and the shortage of cash. Economist John Robertson says the daily cash shortfall in the banking system is about $Z100 billion, or $US30 million.
Analysts blame Zimbabwe's hyper-inflation, super-high interest rates and high unemployment and poverty on a series of government policies, including political repression and a disastrous land reform program. The government blames foreign countries for interfering in its internal affairs.
On Tuesday, a seven-member team from the International Monetary Fund arrived in Zimbabwe to review the economy. Zimbabwe owes the IMF almost $300 million, and its membership has been suspended. Zimbabwe could be forced out of the fund by June 3 if its economy does not stabilize by then.