DBZ AMENDMENT ACT (2001)

The Development Bank of Zambia Amendment Act (2001) forms the basis for the restructuring of the Bank brought into force in 2002.

The important features of the Act which impact on the future shape of the Bank are:-

• Building a strong capital base by increasing the authorised share capital from K 15 billion to Kwacha equivalent of US$700 million.
• Reducing government control of the Bank by limiting shareholding by Government and public institutions to 40% and allowing Class 'B' shareholders comprising private investors, bilateral and multilateral financial institutions to take up the majority of 60%
• Government and public institutions would own 279,999 shares as Class 'A' shareholders, against Class 'B' shareholders who would own 420,000 shares.
• To ensure the Bank does not under this arrangement depart from its function of providing development finance, the Government would in addition hold one (1) Golden Share to ensure the not winding up of the Bank, substantial alteration of its business or sale, transfer or assignment of substantial assets would take place without Government consent.
• Giving the Bank an opportunity for a fresh start totally un-encumbered by past failures by removing all assets, liabilities and obligations relating to the Bank's current non-performing portfolio.
• Strengthening corporate Governance by appointing a competent and fully functional Board which would supervise the work of the Bank.
• The Board of Directors was made the sole authority in the generation of the Bank's lending policies and the appointment of the Chief Executive Officer. The Board appointments would also be biased in favour of private sector members to ensure the Bank is run with the efficiency of the private sector.
• Widening the scope of the Bank's business to include financing for infrastructure and provision of short term finance.

The proposed changes were aimed at starting the process of creating a new Bank that would be financially, organisationally and operationally strong.