Trustco Bank’s license temporarily suspended

Martin Endjala

The Bank of Namibia (BoN) has temporarily suspended Trustco Bank Namibia’s license for a period of six months to rectify certain stipulated and communicated instances of non-compliance.

This comes after BoN issued a statement last week Friday stating that the suspension is in accordance with Section 15(5) of the banking institutions Act no 13 of 2023, and it was done after consultations with the Ministry of Finance and Public Enterprise, which resolved to halt the authorisation of the Trustco Bank Namibia to operate as a banking institution with immediate effect.

According to Johannes !Gawaxab, the BoN’s Governor, the decision emanated from numerous compliance and serious shortcomings of which several internal control weaknesses remain unsolved by Trutco Bank Namibia.

This is despite several repeated interventions by the bank over an extended period directing Trustco Bank Namibia to rectify the shortcomings.

In the event that Trustco Bank Namibia, at the end of its suspension period fails to rectify the shortcomings as provided by the banking institutions Act, BoN will take further action as mandated by the Act.

“The objective of the suspension is to safeguard the integrity of the banking system and formal banking sector amidst the Bank of Namibia’s concerns about Trustco Bank’s internal control environment, as well as its failure to comply with orders and directives issued by the Bank as prudential regulator and supervisor of the banking industry. Further, the suspension is intended to protect the interest of both internal and external stakeholders be they depositors, shareholders, creditors, or the financial sector at large,” said !Gawaxab.

He added that despite the suspension, customers will have access to their deposits at Trustco Bank. Furthermore, the Bank of Namibia emphasises the importance of Trustco Bank customers who have credit facilities to maintain and honour their loan repayment obligations in terms of their agreed contractual terms to prevent listing on credit bureaus or any other measures that may be taken to recover such funds.

“The public is hereby informed that the decision to suspend the banking institution’s license is taken independent of ongoing litigation involving Trustco Bank and the regulator in the High Court of the Republic of Namibia. Such court matters shall proceed as planned. The Bank of Namibia remains committed to fostering banking system stability and integrity by executing its supervisory mandate in line with the provisions of the Banking Institutions Act,” !Gawaxab explained.

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