The Reserve Bank of Zimbabwe has on Tuesday lifted the suspension on bank lending, just over a week after the restriction was put in place.
The suspension of bank lending was announced by President Emmerson Mnangagwa on 7 May as part of a cocktail of measures targeted at reducing parallel market exchange activities, stabilising exchange rates, and promoting the use of the Zimbabwe dollar.
The move to suspend bank lending however triggered a massive backlash from industry and business, who warned that it would choke capital financing, scare away potential investors and disrupt the market.
Just eight days after the Reserve Bank issued a circular directing banks to implement the policy position, the bank has rescinded the directive.
Central Bank governor Dr. John Mangudya, in a statement, said the suspension of lending by banks had been lifted with immediate effect.
“Further to the circular the Reserve Bank of Zimbabwe (the Bank) issued to banks on 9 May 2022, the bank wishes to advise the public that the temporary suspension of lending by banks has been lifted with immediate effect,” the statement said.
The upliftment of the suspension does not apply to institutions that are under investigation by the Financial Intelligence Unit, an arm of the Central Bank, according to the statement.
“The lifting of the suspension does not apply to those entities that are under investigation by the Financial Intelligence Unit (FIU) for abusing loan facilities to the detriment of the economy. The FIU has accordingly advised all the banks of the affected entities.”