The Bank of Zambia (BoZ) through the Banking and Finacial services Act of 2017 has declared Zampost Microfinance Limited (ZMLF) and Pan African Building Society (PABS) bankrupt.

According to a statement made available to Lusaka Star by the Central Bank, BoZ Deputy Governor of operations Dr Francis Chipimo said that the Central Bank took full possession of both institutions as they fell into insolvency effective 19 July, 2019.

Dr Chipimo said that the decision was made after a prepared statement of Affairs of the Assets and Liabilities within the 90 days stipulated in Section 72 of the Banking and Financial Services Act (BFSA), No. 7 of 2017.

The Bank of Zambia is empowered, under Section 72 of the BFSA, to take possession of a financial service provider where such a financial service provider fails to comply with this Act and any rule or regulatory statement issued in accordance with this Act or any other applicable law.

Dr Chipomo said.

He explained that the decision was reached so as to safeguard the interests of the public and provide for the orderly exit of the two institutions from the financial sector.

He stressed that shareholders, directors, depositors, creditors and any other interested parties can file an appeal against the liquidation orders to the court stating the grounds for objection, in accordance with section 127 (3) of the BFSA within 30 days from the date of notice.

Dr Chipimo added that the Bank has since appointed a liquidation manager to oversee the activities of the liquidation process.

Zampost and Pan African Building Society have become the second and third financial service providers to become insolvent in three years after Intermarket Banking Corporation Zambia Limited went under liquidation in 2016.