The High Court has dismissed an application by Reinforced Steel Contractors Zimbabwe seeking to compel FBC Bank to disclose documents relating to foreign currency allocations made through the Reserve Bank of Zimbabwe’s auction system. Newssubscription
Justice Samuel Deme ruled that FBC could not disclose the information without authorisation from the central bank, citing banking secrecy provisions under Section 76 of the Banking Act.
Reinforced Steel Contractors Zimbabwe had cited FBC Bank and the Sheriff of Zimbabwe as respondents, seeking a mandatory interdict compelling the bank to provide the documents within seven days.
The company wanted correspondence between FBC and the Reserve Bank of Zimbabwe (RBZ) concerning its foreign currency allocations, including confirmation on whether funds corresponding to its allocations had been transferred to the bank. History
It also sought internal FBC memoranda, reports and electronic correspondence concerning the alleged non-receipt of the funds and the bank’s subsequent offer of Treasury Bills in lieu of the foreign currency.
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The dispute dates to November and December 2023, when the steel company participated in the RBZ foreign currency auction through FBC.
According to court papers, FBC advised the company to submit bids each Monday and maintain sufficient local currency in its account to cover the foreign currency sought.
The company said FBC subsequently notified it on five occasions that it had been allocated foreign currency, but its account was not debited in foreign currency.
In August 2024, FBC informed the company that the RBZ was issuing Treasury Bills to clients whose allocated foreign currency had not been received. The company declined the offer and instead sought documents relating to the transactions.
FBC refused, arguing that the information was confidential and included information belonging to third parties who had not consented to its disclosure.
The bank also argued that foreign currency allocations were conditional on the actual release of funds by the RBZ, which was responsible for supplying the currency.
Justice Deme agreed with the bank.
He said the constitutional right of access to information was not absolute and could be restricted by legislation.
“Section 76 of the Banking Act is one such piece of legislation that may restrict the right of access to information in the manner contemplated by the Constitution,” Deme said.
The judge said FBC had been performing functions of the RBZ by distributing or selling foreign currency to successful auction bidders, and the information sought had been supplied to the bank by the central bank.
He said the information therefore fell within the scope of Section 76(2) of the Banking Act and could not be disclosed without RBZ authorisation.
Deme further noted that disclosing such information without the central bank’s authority constituted an offence under Section 76(4) of the Act.
“Compelling the first respondent (bank) to release the information requested will violate the provisions of Section 76(2) of the Banking Act,” he said.
The judge said the steel company should have approached the RBZ under the appropriate law.
He dismissed the application with costs, finding that it lacked a legal foundation because it ignored statutory restrictions governing disclosure of banking information.
The ruling effectively leaves the company unable to obtain the requested records from FBC without the RBZ’s consent.-newsday
