BANK
SUPERVISION
DIVISION


Prudential
Standards
No.
07-‐2014/BSD


FITNESS
&
PROBITY
ASSESSMENT
CRITERIA

Table
of
Contents


1.

PRELIMINARY


2.

INTRODUCTION


3.

OBJECTIVES
OF
THE
FIT
AND
PROPER
PERSON
PRUDENTIAL
STANDARDS

4.

APPLICATIONOF
THE
FIT
&
PROPER
PERSON
TEST

5.

PERSONS
SUBJECT
TO
FIT
AND
PROPER
PERSON
ASSESSMENT

6.

FIT
AND
PROPER

PERSON
ASSESSMENT
CRITERIA

7.

RESPONSIBILITY
OF
PERSONS
SUBJECT
TO
FIT
AND
PROPER
PERSON
TEST

8.

RESPONSIBILITY
OF
THE
BOARD
OF
DIRECTORS

9.

RESPONSIBILITY
OF
THE
RESERVE
BANK
WITH
REGARDS
THE

FIT
AND
PROPER
PERSON


TEST
..

10.
DOCUMENTS
TO
BE
SUBMITTED
FOR
THE
FITNESS
&
PROBITY
ASSESSMENT

11.
STEPS
TO
BE
TAKEN
BEFORE
DECLARING
A
PERSON
NOT
FIT
AND
PROPER

12.
ROLE
OF
THE

EXTERNAL
AUDITORS

13.
WHISTLEBLOWING

14.
CONCLUSION


15.
COMMENCEMENT


APPENDIX
A


1.
PRELIMINARY

1.1.
ShortTitle

Prudential
Standards
on
the
Fitness
and
Probity
Assessment
Criteria

1.2.
Authorization

1.2.1. The
Prudential
Standards
are
issued
pursuant
to
section

of
the
Banking
Act

[Chapter
24:
20].


1.2.2. Section

of
the
Banking
Act
as
read
with
section

and

of
the
same
and

section

of
the
Banking
Regulations,
Statutory
Instrument

of
2000,

require
directors
and
senior
management
officers
of
regulated
entities
to
be

fit
and
proper
persons.

1.2.3. On
acquisition
of
a
significant
interest
as
per
the
threshold
stipulated
in
the

Banking
Regulations,
shareholders
are
also
assessed
for
fitness
and
probity.


1.2.4. In
terms
of
section

of
the
Banking
Act,
the
Reserve
Bank
is
responsible
for

the
approval
of
appointment
of
regulated
entities
external
auditors.


1.3.
Scope
of
Application

These
Prudential
Standards
shall
apply
to
all
banking
and
non
banking
institutions

that
are
licensed
and
supervised
by
the
Reserve
Bank
of
Zimbabwe
including
bank

controlling
companies.


1.4.
Definitions

1.4.1. Unless
the
context
otherwise
requires,
terms,
words
or
expressions
contained

in
these
prudential
standards
shall
bear
the
same
meaning
as
in
the
Banking

Act
[Chapter
24:20]
as
may
be
amended
or
any
statutory
instruments
issued

in
terms
thereof
in
force
at
the
date
of
issuance
of
these
prudential
standards.


1.4.2. In
these
Prudential
Standards,


“Applicant”
means
any
person
subject
to
the
fit
and
proper
assessment
test,

“Fit
&
Proper
Person”
means
one
who
is
of
good
character,
competent,
capable,
honest,


financially
sound,
reputable
and
reliable.


“Key
Responsible
Person”
means
as
a
person
who:

i) has
the
authority,
makes
or
has
substantial
influence
in
making
decisions
that
affect

the
whole
or
a
substantial
part
of
the
regulated
entity’s
business;


ii) is
principally
accountable
or
responsible,
whether
solely
or
jointly
with
other
persons,

for
implementing
and
enforcing
policies
and
strategies
approved
by
the
board;
or

iii) is
principally
accountable
or
responsible,
whether
solely
or
jointly
with
other
persons,

for
developing
and
implementing
systems,
internal
controls
and
processes
that

identify,
measure,
monitor
or
control
the
regulated
entity’s
risks.

“Person”
means
a
natural
person
or
an
institution
with
legal
rights
and
duties
as

applicable.


“Regulated
entity”
means
any
corporation
or
entity
registered
under
applicable
law
or

whose
activities
require
an
approval
or
licence
granted
by
the
Reserve
Bank
of

Zimbabwe.


1.5.
Unless
the
context
otherwise
requires,
words
or
expressions
contained
in
these

prudential
standards
shall
bear
the
same
meaning
as
in
the
Banking
Act
[Chapter

24:20]
or
as
amended
or
any
statutory
instruments
issued
in
terms
thereof
in
force
at

the
date
of
these
prudential
standards.


2.
INTRODUCTION

2.1.
Members
of
the
board
and
senior
management
provide
strategic
leadership
that

influences
the
financial
condition,
performance
and
future
direction
of
a
regulated

entity.
As
such,
persons
in
these
positions
should
have
the
necessary
qualities,

competencies
and
experience
that
will
allow
them
to
perform
the
duties
and
carry

out
the
responsibilities
required
of
the
position
in
the
most
effective
manner.

2.2.
The
expectations
on
the
suitability
of
persons
in
key
positions
are
an
extension
of
the

corporate
governance
framework
and
are
also
aimed
at
ensuring
that
the
regulated

entity
is
led
by
persons
of
integrity,
credibility
and
competency.

2.3.
The
Prudential
Standards
set
out
the
criteria
used
by
the
Reserve
Bank
of
Zimbabwe

(Reserve
Bank)
in
determining
the
fitness
and
probity
of
key
responsible
persons
in

entities
supervised
by
the
Reserve
Bank.


2.4.
The
Prudential
Standards
set
the
minimum
fit
and
proper
assessment
criteria

applicable
to
such
key
responsible
persons.

2.5.
The
Prudential
Standards
are
meant
to
provide
general
guidance
and
not
intended
to

replace
or
override
any
legislative
provision
but
to
be
read
in
conjunction
with
the

relevant
provisions
of
applicable
law.


3.
OBJECTIVES
OF
THE
FIT
AND
PROPER
PERSON
PRUDENTIAL
STANDARDS

3.1.
These
Prudential
Standards
set
out
a
framework
which
can
be
used
by
both
the

Reserve
Bank
and
regulated
entities
in
determining
whether
a
person
is
fit
and

proper
to
hold
a
key
position
in
a
regulated
entity.


3.2.
Further,
the
Prudential
Standards
ensure
that
an
objective
criteria
is
provided
in

assessing
a
person
for
fitness
and
probity.
The
Prudential
Standards
further
ensure

that
due
process
is
observed
in
arriving
at
a
decision
whether
a
person
is
fit
and

proper.


4.
APPLICATIONOF
THE
FIT
&
PROPER
PERSON
TEST

4.1.
In
determining
whether
a
person
meets
the
fit
and
proper
assessment
requirements,

the

considerations
set
out
in
terms
of
these
Prudential
Standards
are
assessed

individually
(according
to
their
relative
importance)
as
well
as
on
a
cumulative
basis.


4.2.
Failure
to
meet
one
indicator
may
not,
on
its
own,
necessarily
mean
failure
to
meet

the
fit
and
proper
criteria.
The
Reserve
Bank
will
consider
the
specific
circumstances

surrounding
a
person’s
failure
to
meet
specific
indicators,
including
the
lapse
of
time

since
the
occurrence
of
events
and
the
significance
of
the
event
from
the
perspective

of
potential
risks
posed
to
the
regulated
entity.
The
process
involves
a
good
measure

of
judgment
which
must
be
exercised
as
objectively
as
is
possible
and
in
the
best

interests
of
the
regulated
entity.

4.3.
Considerations
relevant
to
the
assessment
of
the
fitness
and
probity
of
key

responsible
persons
may
vary
depending
on
the
role
and
responsibilities
in
the
affairs

of
the
regulated
entity.
For
example,
for
an
executive
director,
there
will
be
more

emphasis
on
qualifications
and
experience
as
they
are
involved
in
the
day
to
day

operations
of
the
regulated
entity.
For
a
non
executive
director
on
the
other
hand,

there
will
be
more
emphasis
on
experience
and
exposure
as
opposed
to

qualifications.


4.4.
Further,
the
Reserve
Bank
may
consider
whether
there
have
been
material
changes

in
the
nature
or
scope
of
responsibilities
assumed
by
an
individual
which
would
call

for
higher
standards
of
competence
or
judgment
in
order
to
properly
perform
the

duties
associated
with
the
said
position.
Similarly,
circumstances
which
warrant
an

individual
to
be
considered
as
fit
and
proper
may
differ
between
positions.

4.5.
Further,
these
Prudential
Standards
place
the
responsibility
on
the
board
of
directors

of
each
regulated
entity
to
ensure
that
the
entity
has
policies
and
procedures

covering
fitness
and
probity
including
assessment
criteria.


4.6.
An
application
for
fitness
and
probity
assessment
presented
to
the
Reserve
Bank

should
have
passed
the
regulated
entity’s
internal
vetting
process.


4.7.
It
is
the
responsibility
of
each
applicant
to
establish,
on
reasonable
grounds,
that

he/she
is
a
fit
and
proper
person.

4.8.
Should
the
key
responsible
person
fail
to
satisfy
the
Reserve
Bank
that
he/she
is
fit

and
proper;
the
Reserve
Bank
may
reject
the
person’s
application,
revoke
the

person’s
authorization
or
exemption,
or
take
other
appropriate
regulatory
action
as

deemed
necessary.

5.
PERSONS
SUBJECT
TO
FIT
AND
PROPER
PERSON
ASSESSMENT

5.1.
The
following
key
responsible
persons
are
required
to
be
vetted
under
the
fit
and

proper
person
assessment
criteria:

a)
directors;

b) shareholders
with
a
significant
shareholding
in
a
regulated
entity
or
on
acquiring

a
significant
shareholding
in
a
regulated
entity.
In
some
cases,
significant

shareholders
may
be
corporate
entities
and
in
these
instances,
applicable
fit
and

proper
tests
will
be
applied;

c)
principal
officers
including
the
Chief
Executive
Officer
and
Chief
Accounting

Officer
(by
whatever
name
they
may
be
called);

d) any
person
performing
a
senior
management
function
in
the
following
areas:


i.
risk
management;

ii.
lending
and
credit
administration;

iii.
operations
and
internal
controls;

iv.
investments
and
asset/liability
management;

v.
treasury
and
foreign
exchange
operations;

vi.
compliance;

vii.

trust
and
fiduciary
operations,
where
a
banking
institution
proposes
to
engage

in
these
activities;
and

viii.
any
person
who
has
primary
or
significant
responsibility
for
key
control

functions.

5.2.
Any
person
who
has
primary
or
significant
responsibility
for
key
control
functions

refers
to
one
who
is
principally
accountable
whether
solely
or
jointly
with
others
for

monitoring
the
appropriateness,
adequacy
and
effectiveness
of
the
regulated
entity’s

internal
controls,
risk
management
and
compliance
systems
and
processes
and

includes
the
external
auditor,
internal
auditor,
risk
manager
and
compliance
officer.

5.3.
These
Prudential
Standards
also
apply
to
persons
that
are
mainly
accountable
or

responsible
for
key
functions
that
are
performed
outside
of
the
regulated
entity
such

as
under
centralized
group
and
outsourced
key
functions.

5.4.
The
Reserve
Bank
may
further
designate
any
person
as
a
key
responsible
person
if

satisfied
that
the
person
plays
a
significant
role
in
the
management
and/or
the

control
of
the
regulated
entity.
Where
the
Reserve
Bank
makes
such
a
determination,

that
fact
will
be
notified
in
writing
to
the
regulated
entity.


6.
FIT
AND
PROPER

PERSON
ASSESSMENT
CRITERIA

6.1.
The
fit
and
proper
person
assessment
criteria
will
be
applied
at
licensing,

appointment
of
a
key
responsible
person,
appointment
or
re-‐appointment
of
a

director
and
on
acquisition
of
significant
shareholding.

6.2.
For
the
purpose
of
establishing
whether
a
person
is
fit
and
proper
to
hold
a
key

responsible
position,
the
Reserve
Bank
will
exercise
judgment
and
discretion
in
all

relevant
matters
including:

i)
Probity,
personal
integrity
and
reputation;

ii)
Competence
and
capability;
and

iii) Financial
soundness.


Probity,
Personal
Integrity
and
Reputation...

6.3.

A
person
must
have
the
personal
qualities
such
as
honesty,
integrity,
diligence,

independence
of
mind
and
fairness
and
a
disciplined
and
on-‐ongoing
commitment
to

high
ethical
standards.
In
assessing
a
person’s
level
of
probity,
integrity
and

reputation
to
hold
a
position
of
a
key
responsible
person,
the
Reserve
Bank
will

consider
matters
including,
but
not
limited
to
the
following:

a)
whether
the
person
is
or
has
been
the
subject
of
any
proceedings
of
a

disciplinary
or
criminal
nature,
or
has
been
notified
of
any
impending

proceedings
or
of
any
investigations,
which
might
lead
to
such
proceedings;

b) whether
the
person
has
been
subject
of
civil
or
financial
crime
within
the
last


five
(5)
years
or
enforcement
action,
in
relation
to
the
management
of
an
entity,

or
commercial
or
professional
activities,
which
were
determined
adversely
to
the

person
(including
by
the
person
consenting
to
an
order
or
direction,
or
giving
an

undertaking,
not
to
engage
in
unlawful
or
improper
conduct)
and
which

reflected
adversely
on
the
person’s
competence,
diligence,
judgment,
honesty
or

integrity;

c)
whether
the
person
has
contravened
any
provision
made
by
or
under
any

written
law
designed
to
protect
members
of
the
public
against
financial
loss
due

to
dishonesty,
incompetence
or
malpractice;

d) whether
the
person
has
contravened
any
of
the
requirements
and
standards
of
a

regulatory
body,
professional
body,
government
or
its
agencies;

e) whether
the
person,
or
any
business
in
which
he
has
a
controlling
interest
or

exercises
significant
influence,
has
been
investigated,
disciplined,
suspended
or

reprimanded
by
a
regulatory
or
professional
body,
a
court
or
tribunal,
whether

publicly
or
privately;

f)
whether
the
person
has
been
engaged
in
any
business
practices
in
a
negligent,

deceitful,
oppressive
or
otherwise
improper
(whether
unlawful
or
not),
or

otherwise
discreditable
business
or
professional
practices;

g)
whether
the
person
has
been
associated,
in
ownership
or
management
capacity,

with
a
company,
partnership
or
other
business
association
that
has
been
refused

registration,
authorization,
membership
or
a
license
to
conduct
any
trade,

business
or
profession,
or
has
had
that
registration,
authorization,
membership

or
licence
revoked,
withdrawn
or
terminated
and
whether
there
is
proof
that
the

person’s
actions
or
failure
to
act
contributed
to
receivership,
insolvency,
or


liquidation;

h) whether
the
person
has
held
a
position
of
responsibility
in
the
management
of
a

business
that
has
gone
into

insolvency,
or

liquidation
while
the
person
was

connected
with
that
business
and
whether
there
is
proof
that
the
person’s

actions
or
failure
to
act
contributed
to
receivership,
insolvency,
or

liquidation
;

i)
whether
the
person
has
been
a
director
of,
or
directly
concerned
in
the

management
of,
any
institution
which
is
being
or
has
been
wound
up
by
a
court

or
other
authority
competent
to
do
so,
or
of
any
regulated
entity,
the
licence
of

which
has
been
revoked
under
any
written
law
and
whether
there
is
proof
that

the
person’s
actions
or
lack
of
action
contributed
to
the
winding
up;

j)
whether
the
person
has
at
any
time
shown
a
strong
objection
or
lack
of

willingness
to
cooperate
with
regulatory
authorities
and
failure
to
comply
with

legal,
regulatory
and
professional
requirements
and
standards,
including

compliance
with
tax
requirements
and
obligations,
maintenance
of
effective

internal
control
systems
and
risk
management
practices;

k)
whether
the
person
has
failed
to
meet
his
debts
as
they
fall
due
or
manage
his

financial
affairs
satisfactorily;
and

l)
whether
the
person
is
free
from
any
business
or
other
relationship
which
could

materially
pose
a
conflict
of
interest
or
interfere
with
the
exercise
of
his

judgment
when
acting
in
the
capacity
of
a
key
responsible
person
which
would

be
disadvantageous
to
the
regulated
entity
or
its
interest.

Competence
and
Capability...

6.4.
A
person
must
have
the
necessary
skills,
experience,
ability
and
commitment
to
carry

out
the
role.
Competency
and
capacity
are
demonstrated
by
a
person
who
possesses

the
relevant
qualification,
experience
and
ability
to
understand
the
technical

requirements
of
the
position.


6.5.
In
assessing
a
person’s
competence
and
capability,
the
Reserve
Bank
will
consider


matters
including,
but
not
limited
to
the
following:

i)
whether
the
person
has
the
appropriate
qualification,
training,
skills,
practical

experience
and
commitment
to
effectively
fulfill
the
role
and
responsibilities
of

the
position
and
in
the
case
of
directors,
having
regard
to
their
other

commitments;


ii)
whether
the
person
has
satisfactory
past
performance
or
expertise
in
the
nature

of
the
business
being
conducted
or
position
being
appointed
to;

iii) whether
the
person
has
been
disciplined
by
a
professional,
trade
or
regulatory

body,
dismissed
or
requested
to
resign
from
any
position
or
office
for

negligence,
incompetence,

mismanagement,
fraud
or
other
criminal
conduct;


iv) where
the
person
is
an
individual
who
is
assuming
concurrent
responsibilities,

whether
such
responsibilities
would
give
rise
to
a
conflict
of
interest
or

otherwise
impair
his
ability
to
discharge
his/her
duties;

v)
in
relation
to
a
person
who
should
be
a
registered
professional,
such
as
an

auditor,
public
accountant,
legal
practitioner,
estate
administrator
or
liquidator;

whether
such
registration
subsists;
and

vi) whether
the
person
has
a
sound
knowledge
of
the
business
and
the

responsibilities
of
the
position
(soundness
of
judgment
is
derived
from
lack
of

adverse
information
and
cannot
stand
alone).

Financial
Soundness...

6.6.
In
order
to
demonstrate
his/her
capacity
to
ensure
safety
and
soundness
of
a

regulated
entity,
including
the
balancing
of
risks
and
rewards,
and
protect
the

interests
of
depositors
and
other
stakeholders,
a
person
must
demonstrate,
to
the

satisfaction
of
the
Reserve
Bank,
that
he/she
has
managed
his/her
own
financial

affairs
properly
and
prudently.

6.7.
In
determining
a
person’s
financial
soundness,
the
Reserve
Bank
will
consider
all

relevant
factors,
including
but
not
limited
to:

a)
extent
of
liabilities

due
in
comparison

to
assets


b)
failure
to
meet
liabilities
as
they
fall
due,
including
extent
of
non
performing

liabilities

and
litigation
taken
against
the
person;


c)
whether
the
person
has
been
the
subject
of
any
adverse
judgment
or
award;

d)
whether
the
person
has
made
any
arrangements
or
composition
with
his/her

creditors,
filed
for
bankruptcy,
been
adjudged
bankrupt,
had
assets

sequestrated,
or
been
involved
in
proceedings
relating
to
any
of
these;

e)
whether
a
person
has
been
a
senior
officer
of
accompany
or
a
shareholder
of
a

company
that:

i.
has
been
the
subject
of
any
adverse
judgment
or
award,
that
remains

outstanding
or
was
not
satisfied
within
a
reasonable
period;
and

ii.
has
made
any
arrangements
or
composition
with
its
creditors,
filed
for

bankruptcy,
been
adjudged
bankrupt,
had
assets
sequestrated,
liquidated,

placed
under
judicial
management
or
been
involved
in
proceedings
relating
to

any
of
the
foregoing.

6.8.
The
fact
that
a
person
may
be
of
limited
financial
means
will
not,
in
itself,
affect

his/her
ability
to
satisfy
the
financial
soundness
criteria.
However
in
the
case
of
a

shareholder
due
consideration
will
be
given
to
financial
capacity.

6.9.
The
fact
that
one
has
been
involved
with
a
company
that
was
placed
under
judicial

management
or
liquidated,
will
not
in
itself
result
in
adverse
inference
being
drawn,

due
regard
being
placed
on
the
role
of
the
applicant
in
commission
and/or
omission.

6.10.
The
individual
should
not
have
a
record
or
evidence
of
previous
business
conduct
and

activities
of
a
deceitful,
oppressive
or
otherwise
improper
in
nature,
or
which

otherwise
raises
concerns
about
the
individual’s
methods
of
conducting
business.


7.
RESPONSIBILITY
OF
PERSONS
SUBJECT
TO
FIT
AND
PROPER
PERSON
TEST

7.1.
The
applicant
or
key
responsible
person
must
demonstrate
that
they
are
fit
and
proper.

7.2.
He/she
must
provide
all
the
information
that
the
Reserve
Bank
may
require
to
complete

its
investigations.


7.3.
He/she
is
further
required
to
notify
the
Reserve
Bank
forthwith
of
any
events
or

circumstances
that
have
occurred
subsequent
to
their
initial
assessment
of
fit
and
proper

person
that
might
change
the
assessment
or
at
least
have
a
material
bearing
on
it.

8.
RESPONSIBILITY
OF
THE
BOARD
OF
DIRECTORS

8.1.
Regulated
entities
should
establish
policies
and
procedures
that
are
approved
by
the

board
to
ensure
that
all
key
responsible
persons
are
fit
and
proper
to
direct
and
manage

the
regulated
entity’s
key
business
activities
and
functions.
These
policies
and

procedures
should
be
periodically
reviewed
to
ensure
their
relevance
and
alignment
with

material
changes
in
the
business
and
risk
profile
and
strategies
of
the
regulated
entity.


8.2.
The
board
is
responsible
for
monitoring
and
ensuring
on-‐going
compliance
with
the

internal
policies
and
procedures,
including
policies
on
ethical
behavior,
codes
of
conduct,

as
well
as
disclosure
and
reporting
obligations
relating
to
the
fit
and
proper

requirements.

8.3.
The
fit
and
proper
person
assessment
policies
and
procedures
must
at
a
minimum

incorporate:-‐

a)
fit
and
proper
criteria
as
set
out
in
these
prudential
standards;

b)
procedures
and
processes
for
conducting
fit
and
proper
assessments;

c)
factors
considered
in
assessing
whether
a
person
is
fit
and
proper
for
a
specific

position;

d)

actions,
including
internal
governance
process
requirements,
to
be
taken
where
a

key
responsible
person
is
assessed
to
be
no
longer
fit
and
proper
for
a
specific

position;


e)
list
of
key
responsible
persons;
and

f)
records
of
the
process
used
to
assess
whether
a
person
is
fit
and
proper
and

reasons
for
any
decisions
made.

8.4.
The
policies
and
procedures
should
also
provide
for
any
person
within
the
regulated

entity
to
disclose
information
to
the
board
and
the
nominations
committee
that
may
be

relevant
for
a
fit
and
proper
assessment
and
afford
protection
to
such
persons
against

any
discriminatory
actions
by
the
regulated
entity
for
providing
such
information.

8.5.
Regulated
entities
should
take
all
reasonable
steps
to
ensure
that
each
key
responsible

person
to
be
appointed
or
already
appointed
to
assume
key
functions
is
aware
of,
and

understands,
the
regulated
entity’s
fit
and
proper
policy
and
their
obligation
to
continue

to
meet
the
fit
and
proper
requirements
on
an
on-‐going
basis.

8.6.
The
board
and
nominations
committee
(or
any
other
designated
committee)
is
primarily

responsible
for
ensuring
that
all
key
responsible
persons
fulfill
fit
and
proper

requirements
and
for
conducting
assessments
of
the
fitness
and
propriety
of
directors

and
the
Chief
Executive
Officer.
For
other
key
responsible
persons,
decisions
on

appointments
and
assessments
of
fit
and
proper
may
be
made
by
the
Chief
Executive

Officer
or
a
designated
committee
under
the
delegated
authority
of
the
board.
This

should
be
clearly
provided
for
in
the
regulated
entity’s
policies
and
procedures
with

appropriate
reporting
by
the
Chief
Executive
Officer
or
a
designated
committee.

8.7.
The
Reserve
Bank
expects
that
the
fit
and
proper
assessments
of
each
key
responsible

person
be
conducted
both
prior
to
initial
appointment
and
at
regular
intervals
or
when

deemed
necessary.

8.8.
The
documentation
of
fit
and
proper
assessments
for
each
key
responsible
person
should

be
retained
by
the
regulated
entity
for
a
reasonable
period
and
the
period
must
be

specified
in
the
regulated
entity’s
fit
and
proper
policy.
Regulated
entities
should

safeguard
the
ity
of
information
collected
and
assessments
made.


8.9.

To
support
the
supervisory
assessment
process
to
determine
the
rigor
and
effectiveness

of
the
fit
and
proper
assessment
policies
and
procedures
within
a
regulated
entity,
the

following
information
should
be
made
readily
available
for
inspection
by
the
Reserve

Bank
upon
request:

a)
regulated
entity’s
internal
fit
and
proper
policies
and
procedures;

b)
list
of
key
responsible
persons
within
the
regulated
entity;
and

c)
documentation
of
fit
and
proper
assessment
for
each
key
responsible
person.

8.10.
Where
the
nomination
committee
(or
any
other
designated
committee)
has
assessed

that
a
person:

a)
is
not
fit
and
proper
for
a
position,
the
board
shall
not
appoint
the
person
to
the

said
position;
and

b)
is
no
longer
fit
and
proper
for
a
position,
the
board
shall
take
reasonable
steps
to

remove
the
person
from
such
position
as
soon
as
practicable
and
in
the
interim,

institute
necessary
measures
to
mitigate
risks
associated
with
the
person

continuing
to
hold
the
position.


9.
RESPONSIBILITY
OF
THE
RESERVE
BANK
WITH
REGARDS
THE

FIT
AND
PROPER
PERSON


TEST

9.1.
The
Registrar
will
assess
the
information
submitted
in
respect
of
an
applicant
and
decide

on
the
individual’s
fitness
and
probity.

9.2.
The
Registrar
will
also
use
other
information
that
may
be
publicly
available
in
assessing
a

person’s
fitness
and
probity.

9.3.
If
a
person
to
whom
the
Registrar
has
made
a
request
to
so
submit
fails
or
refuses
to

provide
the
requested
information
or
provides
the
Registrar
with
information
which
is

materially
inaccurate,
misleading
or
incomplete,
the
Registrar
may
determine
that
he/

she
is
not
a
fit
and
proper
person
to
hold
shares
or
occupy
a
position
or
office
in
an
entity

supervised
by
the
Reserve
Bank.

9.4.
The
Reserve
Bank
will
monitor
the
fitness
and
probity
of
approved
persons
on
an
ongoing

basis
and
may
recommend
removal
of
a
person
where
the
person
is
no
longer
fit
and

proper.


10. DOCUMENTS
TO
BE
SUBMITTED
FOR
THE
FITNESS
&
PROBITY
ASSESSMENT

10.1. The
following
original
documentation
should
be
submitted
to
the
Reserve
Bank:

i)
affidavit
of
fitness
and
probity
in
the
format
prescribed
in
Appendix
A;

ii)
police
clearance
certificate
(less
than
six
months
old);

iii)
Zimbabwe
Revenue
Authority
(ZIMRA)
tax
clearance
certificate
(less
than

months
old)
or
other
tax
certificate
from
the
relevant
authority
from
the

applicant’s
jurisdiction;

iv)
statement
of
networth
signed
by
a
public
accountant;


v)
curriculum
vitae;

vi)
any
other
document
that
the
Reserve
Bank
may
deem
necessary.

10.2. Companies
will
be
required
to
submit
similar
documents
as
above,
as
applicable.
In


addition
the
following
documents
will
be
required:


i)
copy
of
the
company’s
Memorandum
of
Association
and
Articles
of
Association;

ii)
Certificate
of

Incorporation;

iii)
sources
of
funding
(local
and
foreign
must
be
verifiable,
free
from
encumbrances

and
not
of
illicit
source);

iv)
copies
of
audited
financial
statements
of
the
company
concerned,
for
three

consecutive
years
immediately
preceding
its
application
or
for
each
year
it
has

been
in
operation,
if
less
than
three
(3)
years;


v)
any
other
document
that
the
Reserve
Bank

may
deem

necessary;
and

10.3. In
the
event
of
documents
being
submitted
from
outside
Zimbabwe,
(with
the
exception

of
a
curriculum
vitae),
these
must
be
certified
by
a
notary
public
registered
in
the
country

of
origin
of
documents
while
an
affidavit
must
be
signed
before
a
Commissioner
of
oaths

in
the
country
of
origin
of
documents.


11. STEPS
TO
BE
TAKEN
BEFORE
DECLARING
A
PERSON
NOT
FIT
AND
PROPER

11.1. Due
process
must
be
observed
prior
to
a
person
being
declared
not
fit
and
proper.
The

Reserve
Bank
will
ensure
that
there
is
compliance
with
the
steps
listed
hereunder:


Step

:
assess
submitted
documentation;


Step2:
where
there
is
an
intention
to
reject
an
applicant,
write
to
the
applicant
or

institution
advising
of
the
intention
to
declare
not
fit
and
proper
and
seek

representations;


Step3:
where
representations
are
received,
to
consider
representations
before
the

Registrar
makes
a
decision
whether
to
proceed
with
the
declaration
or
not.

12. ROLE
OF
THE

EXTERNAL
AUDITORS

12.1. The
board
shall
request
the
external
auditors
to
advise
and
provide
all
necessary
details

if
they
become
aware
of
information
that
points
to
non-‐compliance
or
potential
non-‐
compliance
with
the
fit
and
proper
requirements
of
these
Prudential
Standards.

13. WHISTLEBLOWING

13.1. Whistle
blowing
is
an
important
mechanism
in
prevention
and
detection
of
improper

conduct,
fraud
and
corruption.
A
regulated
entity
should
implement
an
appropriate

policy
in
its
organizational
structure
in
order
to
raise
awareness
of
the
whistle
blowing

process
which
is
available
to
raise
concerns
about
improper
conduct
within
the

institution.
The
process
should
include
reporting
concerns
over
key
responsible
persons’

fitness
and
probity
to
the
Chief
Executive
Officer
(or
equivalent)
or
to
the
Reserve
Bank

without
the
risk
of
reprisal
and
detrimental
actions.
The
policy
should
outline
the

mechanisms
for
the
protection
of
employees
who
make
such
a
disclosure.

14. CONCLUSION

14.1. Best
practices
are
designed
and
intended
to
be
in
place
to
ensure
that
supervisors
are

aware,
at
the
authorization
stage,
of
senior
management,
directors
and
shareholders

who
can
exert
a
material
influence,
directly
or
indirectly,
on
the
operations
of
regulated

entities,
and
thereafter,
are
notified
of
changes
regarding
the
positions
of
senior

management,
directors
and
shareholders,
on
the
occurrence
of
specified
events.


14.2. The
Reserve
Bank’s
expectations
are
that
regulated
entities
will
take
the
measures

necessary
to
ensure
that
fitness,
probity
or
other
qualification
tests
are
met
on
an

ongoing
basis.

15. COMMENCEMENT

These
Prudential
Standards
shall
come
into
force
immediately
on
the
date
of
issue.


Reserve
Bank
of
Zimbabwe


July

APPENDIX
A

AFFIDAVIT
OF
FITNESS
AND
PROBITY

I,
[insert
name,
national
registration
number]
of
[insert
physical
address],
do
hereby
make
oath

and
state
that:

1. [insert
declarations
as
to
directorships
in
other
companies];


2. [insert
declarations
as
to
shareholding
in
other
companies
(including
shareholding
in
a

related
subsidiary,
whether
held
directly
or
indirectly
through
other
interests];


3. [insert
declarations
as
to
whether
you
have
the
appropriate
qualification
and
experience
to

effectively
fulfill
the
role
and
responsibilities
of
the
position
and
enclose
curriculum
vitae];


4. [insert
declarations
as
to
whether
you
are
assuming
concurrent
responsibilities
and
how

you
will
manage
conflict
of
interest
and
ability
to
discharge
your
duties];


5. [insert
declarations
as
to
whether
you
are
or
have
been
the
subject
of
any
proceedings
of
a

disciplinary
or
criminal
nature,
or
have
been
notified
of
any
impending
proceedings
or
of

any
investigations,
which
might
lead
to
such
proceedings];


6. [insert
declarations
as
to
whether
you
are
or
have
been
the
subject
of
civil
or
financial
crime

within
the
last
five
(5)
years
or
enforcement
action,
in
relation
to
the
management
of
an

entity,
or
commercial
or
professional
activities,
which
were
determined
adversely
against

you
(including
consenting
to
an
order
or
direction,
or
giving
an
undertaking,
not
to
engage

in
unlawful
or
improper
conduct)];


7. [insert
declarations
as
to
whether
you
have
faced
criminal
convictions
or
served

sentences


and
whether
you
have
been
granted
free
pardons,
whether
in
Zimbabwe
or
any
other

country];


8. [insert
declarations
as
to
whether
you
have
contravened
any
provision
made
by
or
under


any
written
law
designed
to
protect
members
of
the
public
against
financial
loss
due
to

dishonesty,
incompetence
or
malpractice];


9. [insert
declarations
as
to
whether
you
have
contravened
any
of
the
requirements
and

standards
of
a
regulatory
body,
professional
body,
government
or
its
agencies];

10. [insert
declarations
as
to
whether
you
or
any
business
in
which
you
have
a
controlling

interest
or
exercises
significant
influence,
has
been
investigated,
disciplined,
suspended
or

reprimanded
by
a
regulatory
or
professional
body,
a
court
or
tribunal,
whether
publicly
or

privately];


11. [insert
declarations
as
to
whether
you
have
been
engaged
in
any
business
practices
in
a

negligent,
deceitful,
oppressive
or
otherwise
improper
(whether
unlawful
or
not),
or

otherwise
discreditable
business
or
professional
practices];


12. [insert
declarations
as
to
whether
you
have
been
associated,
in
ownership
or
management

capacity,
with
a
company,
partnership
or
other
business
association
that
has
been
refused

registration,
authorization,
membership
or
a
license
to
conduct
any
trade,
business
or

profession,
or
has
had
that
registration,
authorization,
membership
or
licence
revoked,

withdrawn
or
terminated];


13. [insert
declarations
as
to
whether
you
have
made
any
arrangements
or
composition
with

your
creditors,
filed
for
bankruptcy,
been
adjudged
bankrupt,
had
assets
sequestrated,
or

been
involved
in
proceedings
relating
to
any
of
these];


14. [insert
declarations
as
to
whether
you
have
held
a
position
of
responsibility
in
the

management
of
a
business
that
has
gone
into

insolvency,
or
liquidation
while
you
were

connected
with
that
business
and
whether
you
contributed
to
receivership,
insolvency,
or


liquidation];


15. [insert
declarations
as
to
whether
you
have
been
a
director
of,
or
directly
concerned
in
the

management
of,
any
institution
which
is
being
or
has
been
wound
up
by
a
court
or
other

authority
competent
to
do
so,
or
of
any
regulated
entity,
the
licence
of
which
has
been

revoked
under
any
written
law
and
whether
you
contributed
to
the
winding
up];


16. [insert
declarations
as
to
whether
you
have
non-‐performing
loans
with
any
banking

institution,
building
society,
microfinance
institution
or
other
lending
institution
in

Zimbabwe
or
outside
Zimbabwe];
and


17. [Insert
declarations
as
to
whether
you
are
free
from
any
business
or
other
relationship

which
could
materially
pose
a
conflict
of
interest
in
discharging
your
duties
as
an
appointed

person
within
the
institution].

SWORN
TO
AT
...................................THIS........................DAY
OF
...................................[YEAR]


BEFORE
ME:


COMMISSIONER
OF
OATHS