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Troubled Financial Institutions (Resolution) Act [Chapter 24:28] Act 31/2004
January 14, 2005

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To provide for the administration of troubled financial institutions; to provide for formulation and implementation of schemes of resolution in respect of such institutions; and to provide for matters connected with or incidental to the foregoing.

ENACTED by the President and the Parliament of Zimbabwe.

[Date of commencement: 14th January, 2005.]


1. Title.
2. Application.
3. Interpretation.

Declaration of Troubled Financial Institutions

4. Investigation of certain financial institutions.
5. Action where investigated financial institution not troubled but in default of Banking Act, etc.
6. Declaration of troubled financial institutions.
7. Effect of declaration.
8. Transmission of declaration to certain officers.
9. Confirmation of declaration.

Objects of Administration and Functions of Administrator

10. Object of administration.
11. General powers of administrator in relation to troubled financial institution.
12. Application of certain provisions of Companies Act to administration.
13. Voidable dispositions of property by troubled financial institutions and specified persons.
14. Statement of troubled financial institution’s affairs.
15. Revaluation of assets, liabilities and share capital of troubled financial institutions.
16. Initial meeting of creditors and members.
17. Subsequent meetings of creditors and members.

Specified Persons in Relation to Troubled Financial Institutions

18. Identification of persons responsible for causing financial institution to be troubled.
19. Special commissioners for taking evidence.
20. Forfeiture or vesting in State of rights of, or disposal of shares held by, specified persons.
21. Attachment of assets of specified persons in satisfaction of their liabilities to troubled financial institution.
22. Powers of administrator in relation to specified persons.
23. Transactions by specified persons.
24. Offences by specified persons.
25. Power of administrator to compromise with persons liable to be specified or prosecuted.

Schemes of Resolution and Interim Management of Successor Financial Institutions

26. Powers of administrator with respect to scheme of resolution.
27. Special provisions for repayment of depositors of troubled financial institutions.
28. Approval of scheme of resolution.
29. Consequences where resolution not possible.
30. Implementation of scheme of resolution and matters incidental thereto.
31. Duties of interim board.


32. Arbitration where valuation of shares, etc. by administrator or Reserve Bank disputed.
33. Persons employed by troubled financial institution before its administration.
34. Application of assets during administration.
35. Remuneration of administrator and assistant administrators.
36. Liabilities incurred by administrator and interim board to have preference over pre-administration liabilities.
37. Period of administration excluded in determining preference under mortgage bond.
38. Position of auditor during administration.
39. Administration expenses.
40. Cancellation of declaration.
41. Offences consequent upon administration.
42. Regulations.
43. Cap. 14:28 not to apply.



1 Title

This Act may be cited as the Troubled Financial Institutions (Resolution) Act [Chapter 24:28].

2 Application

This Act shall apply to all financial institutions referred to in section 6(1), including those formed, registered or incorporated before the date of commencement of this Act:

Provided that if the Reserve Bank proposes to issue a declaration in relation to a financial institution, and, before such declaration is issued, there is made or presented to the court—

(a) an application in terms of section 191 of the Companies Act for the sanctioning of a compromise or arrangement proposed between the financial institution and its creditors or members, sections 191 to 194 of that Act; or

(b) a petition for the winding up of the financial institution in terms of section 207 of the Companies Act, Part V or VI of that Act; or

(c) an application for a provisional judicial management order in terms of section 299 of the Companies Act, Part V or VI of that Act;

shall apply to such financial institution unless, within thirty days after the date of presentation of the petition or the making of the application, as the case may be, the Reserve Bank issues a declaration in respect of the financial institution.

3 Interpretation

In this Act:

"administrator" means an administrator appointed under section 6(1), and includes any assistant administrator appointed under that provision;

"administration", in relation to a troubled financial institution, means the administration of the troubled financial institution in accordance with the notice of declaration or a scheme of resolution;

"associate", "board", "curator", "director", "chief executive officer", "inspector", "registered" and "supervisor" have the meanings assigned to those terms by the Banking Act;

"the Banking Act" means the Banking Act [Chapter 24:20];

"the Companies Act" means the Companies Act [Chapter 24:03];

"commencement of the administration" means the date when a declaration in relation to a financial institution takes effect in terms of section 6(7);

"court", "Master", "Registrar", "secretary" and "share" have the meanings assigned to those terms by the Companies Act;

"declaration" means a declaration issued in terms of section 6;

"document" includes any document stored in electronic form in any computer;

"financial institution" means—

(a) any banking institution registered or required to be registered in terms of the Banking Act [Chapter 24:20]; or

(b) any building society registered or required to be registered in terms of the Building Societies Act [Chapter 24:02]; or

(c) the People’s Own Savings Bank established in terms of the People’s Own Savings Bank of Zimbabwe Act [Chapter 24:22]; or

(d) an asset manager as defined in the Asset Management Act [Chapter 24:26]; or

(e) a collective investment scheme as defined in section 3 of the Collective Investment Schemes Act, 1997; or

(f) any person who carries on a business of acceptance of deposits and other repayable funds from the public;

"member", in relation to a financial institution, means¾

(a) a shareholder, debenture-holder or other person having a right to vote at meetings of the financial institution; or

(b) any contributory as defined in section 202 of the Companies Act;

"Minister" means the Minister of Finance and Economic Development or any other Minister to whom the President may, from time to time, assign the administration of this Act;

"officer", in relation to a troubled financial institution, includes an auditor of the institution;

"public funds" means funds held by or on behalf of the State (whether or not appropriated by Act of Parliament) and includes any moneys advanced by the Troubled Bank Fund;

"Reserve Bank" means the Reserve Bank of Zimbabwe referred to in section 4 of the Reserve Bank of Zimbabwe Act [Chapter 24:22];

"scheme of resolution" means a scheme referred to in section 26;

"specified person" means any person specified in terms of section 14(8);

"successor financial institution" means a successor to a troubled financial institution that is reconstructed, amalgamated or transferred in terms of section 10(a), (b) or (c);

"troubled financial institution" means a financial institution in respect of which a declaration has been made;

"Troubled Bank Fund" means the Troubled Bank Fund established by the Reserve Bank for the purpose of providing financial assistance to financial institutions.

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