Bank of Namibia suspends Trustco Bank

August 18, 2023

The Bank of Namibia (BoN), in consultation with the Minister of Finance and Public Enterprises, Ipumbu Shiimi, announced on Friday the temporary suspension of Trustco Bank Namibia's (Trustco Bank) authorization to operate as a banking institution, effective immediately.

Johannes !Gawaxab, the Governor of BoN, stated that this decision was made in accordance with Section 15(5) of the Banking Institutions Act, 2023 (Act No. 13 of 2023).

"The suspension is temporary and is contingent upon Trustco Bank rectifying specific instances of non-compliance within six months from August 18, 2023. If, at the end of the suspension period, Trustco Bank remains non-compliant with provisions of the Banking Institutions Act and the issues leading to its suspension, the Bank of Namibia will take further action as mandated by the Act," Gawaxab explained.

The Governor of the central bank highlighted that the suspension of Trustco Bank's license was prompted by several instances of non-compliance and serious deficiencies, some of which involve unresolved internal control weaknesses.

"Despite repeated interventions by the Bank over an extended period, urging Trustco Bank to address these issues, the suspension aims to uphold the integrity of the banking system and formal banking sector. The Bank of Namibia is concerned about Trustco Bank's internal control environment and its failure to adhere to orders and directives issued by the Bank as the prudential regulator and supervisor of the banking industry. Furthermore, the suspension aims to safeguard the interests of internal and external stakeholders, including depositors, shareholders, creditors, and the broader financial sector," said the Governor.

However, he clarified that despite the suspension, Trustco Bank customers will retain access to their deposited funds.

"The Bank of Namibia underscores the importance for Trustco Bank customers with outstanding credit facilities to fulfill their loan repayment obligations as per the agreed contractual terms. This will prevent potential credit bureau listings or other measures aimed at recovering such funds," said Gawaxab.

The Governor highlighted that the license suspension is unrelated to ongoing litigation involving Trustco Bank, where the central bank has approached the High Court seeking to liquidate the bank, claiming commercial insolvency.

"The public is hereby notified that the decision to suspend Trustco Bank's banking license is distinct from the ongoing litigation between Trustco Bank and the regulator in the High Court of the Republic of Namibia. Legal proceedings will continue as scheduled."

Trustco Bank Namibia has operated in the Namibian market since December 2016, having obtained a commercial banking license from BoN after acquiring Fides Bank.


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Last modified on Monday, 21 August 2023 00:36

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