By Lylie Happiness
Windhoek, 19 August – Bank of Namibia, under the leadership of Governor Johannes !Gawaxeb, has taken the decision to temporarily suspend the authorization of Trustco Bank Namibia (Trustco Bank) to conduct banking business. The move comes in response to several instances of non-compliance and serious shortcomings within Trustco Bank, as well as unresolved internal control weaknesses.
The suspension, effective immediately, is in accordance with section 15(5) of the Banking Institution Act, 2023 (Act No. 13 of 2023). The decision was made after consultation with the Minister of Finance and Public Enterprises. Trustco Bank has been given a six-month period to rectify the identified non-compliances. If these issues are not addressed by the end of the suspension period, further action will be taken by the Bank of Namibia as mandated by the Act.
The primary objective of the suspension is to ensure the integrity of the banking system and the formal banking sector. The Bank of Namibia is concerned about Trustco Bank’s internal control environment and its failure to comply with orders and directives issued by the Bank as a prudential regulator and supervisor of the banking industry. The suspension aims to safeguard the interests of both internal and external stakeholders, including depositors, shareholders, creditors, and the broader financial sector.
It’s important to note that despite the suspension, customers will still have access to their deposits at Trustco Bank. The Bank of Namibia emphasizes the responsibility of Trustco Bank customers with credit facilities to continue honoring their loan repayment obligations as agreed in their contracts to avoid negative consequences such as being listed on credit bureaus.
The suspension decision is independent of ongoing litigation involving Trustco Bank and the regulator in the High Court of the Republic of Namibia. The Bank of Namibia remains committed to maintaining banking system stability and integrity through its supervisory responsibilities. – Namibia Daily News