Building Societies Act
- Commenced on 1 July 1965
- [This is the version of this document at 31 December 2016 and includes any amendments published up to 31 December 2017.]
- [Note: This version of the Act was revised and consolidated by the Law Development Commission of Zimbabwe]
Part I – Preliminary
1. Short titleThis Act may be cited as the Building Societies Act [Chapter 24:02].
2. InterpretationIn this Act—"accredited agent" means a representative of a society with written authority from a society in regard to the acceptance of money in respect of deposits or shares or repayments of advances or loans or the receipt of applications in respect of advances or loans on behalf of that society;"advance" includes one or more advances on the security of a mortgage or a hypothecation of one property or of two or more properties jointly;"approved investment" means an investment approved in terms of paragraph (i) of section seventeen;"authorized deposit" means a deposit mentioned in paragraph (h) of section seventeen;"bank" means-a commercial bank or an accepting house;"board of directors", in relation to any society, means the managing body thereof by whatever name it may be called;"chief executive officer" means the person who is responsible to the board of directors for the general management of a society;"court" means the High Court and, in relation to any offence under this Act, includes a magistrates court having jurisdiction in respect of that offence;"director" includes any person occupying the position of director of a society by whatever name he may be called;"existing share" means a share issued by an existing society which had not been redeemed immediately prior to the 1st July, 1965;"fixed deposit" means a deposit for a period which is fixed in accordance with paragraph (d) of section nineteen;"fixed-period share" means a fully paid-up share issued for a period of not less than five years;"fixed-term advance" means an advance on terms and conditions which provide for the repayment of the capital amount advanced within a fixed period;"hypothecation" means a hypothecation of a registered lease of urban immovable property the unexpired period of which, at the date of the hypothecation, exceeds the period of repayment of the advance made on the security of that hypothecation by not less than ten years;"member", in relation to a society, means a person who holds shares therein, whether fully or partly paid up, which participate in the profits thereof whether or not such shares are held by the society as security for an advance;"Minister" means the Minister of Finance or any other Minister to whom the President may, from time to time, assign the administration of this Act;"mortgage" means a mortgage of urban immovable property or a registered cession of a mortgage bond over urban immovable property;"officer", in relation to a society, means any director, local director, local committee member, manager, secretary, clerk, accredited agent or other employee of the society but does not include an auditor of the society;"permanent share" means a fully paid up share of which the holder shall not be entitled to demand redemption but which the society may redeem after six months’ notice to the holder if its rules so provide;"reducible advance" means an advance on terms and conditions which provide for the reduction of the capital amount advanced by periodical payments;"registered commercial bank", "registered accepting house" and "registered discount house" mean, respectively, a commercial bank, an accepting house and a discount house registered as such under the Banking Act [Chapter 24:01];"Registrar" means the Registrar of Building Societies appointed in terms of section five;"reserves" means the reserves established in terms of section thirty-two and built up out of profits and not set aside for any specific purpose;"savings deposit" means—(a)a deposit other than a fixed deposit; and(b)a deposit for a fixed period not exceeding twelve months;"society" means a building society as defined in section three;"subscription share" means a share which—(a)is paid for by periodical contributions; and(b)is calculated to mature at the expiry of a period of not less than two years.
3. Application of Act
4. Use of certain words
5. Appointment of Registrar
Part II – Registration of societies and matters incidental thereto
6. Prohibition of unregistered society
7. Establishment and registration of society
8. Matters which must be provided for in rules of society
9. Alteration of rules
10. Rules open to publicEvery society shall make a copy of its rules available at every branch and agency of the society for inspection by members of the public during the normal business hours of the society.
11. Registrar may inspect books and accounts of any personThe Registrar may at any time make an inspection or cause an inspection to be made of the books, accounts and records of any person for the purpose of determining whether that person is carrying on the business of a building society or not.
12. Effect of registrationFrom the date of registration of a society under this Act such society shall be a body corporate which shall be capable of suing and of being sued in its registered name and, subject to its rules and of this Act, of doing all such acts as a body corporate may by law perform.
13. Conclusiveness of certificate of registrationA certificate of registration of a society issued by the Registrar shall, upon its mere production, in the absence of proof of fraud, be conclusive evidence that all the requirements of this Act in respect of registration and of matters precedent and incidental thereto have been complied with and that the society is duly registered.
14. Cancellation or suspension of registration
15. Name of society
16. Change of name of society
Part III – Powers of societies, deposits, shares, advances and financial provisions
17. Powers of societiesSubject to this Act, a society shall have power—
18. Minors and married women may be members of society
19. Conditions in regard to depositsNo society shall—
20. Issue of negotiable certificates of depositA society may issue negotiable certificates of deposit whose terms and conditions shall be as prescribed by the Minister.
21. Conditions relating to shares
22. Advances must be reducible or fixed-term advances
23. Limit as to amount of advance
24. Advance on property already mortgaged prohibitedNo society shall advance money on the security of immovable property which is subject to an existing mortgage bond unless such existing mortgage bond is in favour of the society or unless preference under such existing bond is waived in favour of the society.
25. Society may make further advances for certain purposesNotwithstanding section twenty-three, a society may for the purpose of protecting immovable property mortgaged or a lease hypothecated to it or for the purpose of maintaining its security for the repayment of an advance, make a further advance in respect of such items as may be prescribed.
26. Minister to prescribe maximum amounts of advancesThe total of all advances in property, other than residential property, shall not exceed an amount prescribed by the Minister.
27. Valuation of property for purposes of advance
28. Valuator must have no pecuniary interest in advance
29. Duty of director to disclose interest in advance
30. Society may recover certain amounts not permitted by Cap. 14:14A society may obtain judgment for and recover, in addition to the amounts which under section 9 of the Money-lending and Rates of Interest Act [Chapter 14:14] it would be entitled to obtain judgment for and recover under a mortgage or hypothecation, such other items as may be prescribed.
31. Non-compliance with Act does not invalidate advanceNo advance or loan made by or to a society nor any security relating thereto shall be invalidated by reason only of the fact that the society or any officer of the society has, in connection with such advance or loan, contravened any provision of this Act.
33. Restriction on borrowingsA society shall not, save with the consent of the Minister, accept any money on deposit or borrow any money by way of loan or bank overdraft if the sum of its paid-up share capital and the amount of its reserves and unappropriated profits brought forward is or would by so doing be less than the prescribed percentage of the sum of its liability for deposits, loans and bank overdrafts.
34. Society must maintain minimum holding of liquid assets
Part IV – Management and administration
35. Head office of society
36. Financial year of societyThe financial year of every society shall end on the 31st December.[section amended by section 15 of Act 5 of 2011]
37. Periodical statements as to financial position
38. Annual accounts
39. Society must provide fidelity coverEvery society shall, either by insurance with an insurer registered in Zimbabwe or by the establishment of a fidelity reserve or fidelity fund for the purpose, furnish and maintain such security as the Registrar deems adequate to make good any loss resulting from the negligence or dishonesty of any of the society’s officers.
40. Annual and special general meetings
41. Minutes of proceedings of meetings of society or directors
42. Inspection of minute books
43. Keeping of books of account
44. Appointment of auditors
45. Disqualifications for appointment as auditor
46. Contents of auditor’s report
47. Auditor’s right of access to books and to attend general meetings
48. Registrar may examine books of society
49. Investigation of society’s affairs on application of members
50. Investigation of society’s affairs in other casesThe Minister may appoint one or more inspectors to investigate the affairs of a society and to report thereon in such manner as he directs if—
51. Production of documents and evidence on investigationAn inspector appointed by the Minister under this Act shall have the same powers, rights and privileges as are conferred upon a commissioner by the Commissions of Inquiry Act [Chapter 10:07], other than the power to order a person to be detained in custody, and sections 9 to 13 and 15 to 19 of that Act shall apply, mutatis mutandis, in relation to an investigation made in terms of section forty-nine or fifty and to any persons summoned to give evidence or giving evidence at that investigation.
52. Inspector’s reports
53. Proceedings on inspector’s reportIf from any report made under section fifty-two it appears to the Minister that any person has, in relation to the society whose affairs have been investigated, been guilty of an offence for which he is criminally liable, the Minister shall refer the matter to the Prosecutor-General.
54. Expenses of investigation of society’s affairs
55. Savings for legal practitioners and bankersNothing in this Act shall require disclosure to the Minister or to an inspector appointed by him under this Act—
56. Inspector’s report to be evidenceA copy of any report of an inspector appointed under this Act shall be admissible in any legal proceedings as evidence of the opinion of the inspector in relation to any matter contained in the report.
57. Directors and chief executive officer
58. Validity of acts of directorThe acts of a director shall be valid notwithstanding any defect that may afterwards be discovered in his appointment or qualification.
59. Disqualification for appointment as director
60. Amalgamation of two or more societies
61. Modes of winding up
62. Liability of membersIn the event of a society being wound up—
63. Liability of borrowersSubject to section sixty-two, when a society is being wound up, no member or other person to whom an advance has been made under any mortgage or other security or under the rules of the society shall be liable to pay the amount payable under such mortgage, security or rules, except at the time or times and subject to the conditions under which the advance was made.
64. Judicial management of society
Part V – General
65. Lost or destroyed share certificatesIf any share certificate, savings deposit pass book, subscription share pass book or fixed deposit receipt issued by a society is lost or destroyed, the society, upon such evidence including an affidavit setting out the circumstances and subject to such terms and conditions as the directors think fit, and after the loss of such certificate, pass book or receipt has been duly advertised once in the Gazette and once in a newspaper circulating in the town or district in which the member or depositor, as the case may be, resides, may issue a certified copy of such certificate, pass book or receipt:Provided that the directors may in their discretion authorize the issue of such a certified copy without requiring the loss to be advertised.Such certified copy shall thereafter for all purposes take the place of the certificate or receipt so lost or destroyed and be the sole evidence thereof.
66. Inspection of documents by publicOn payment of the prescribed fees, any person may inspect at the office of the Registrar the rules and annual accounts relating to any society or obtain from the Registrar a copy of the certificate of the registration of any society or a copy or extract or part of any such rules and annual accounts kept by the Registrar.
67. Registrar to submit annual reportThe Registrar shall, within six months from the 1st January in each year, submit to the Minister a report in regard to building society business in Zimbabwe during the twelve months ended on the preceding 31st December.
68. Appeals against decision of RegistrarAny applicant for registration or any society which is aggrieved by a decision of the Registrar under section seven, subsection (2) of section nine, subsection (1) of section fourteen, section 5897) or (10), subsection (2) of section sixty or section seventy-two may, within thirty days of being notified of that decision, lodge with the Minister an appeal in writing, setting out the grounds of his appeal, and the decision of the Minister on the appeal shall be final.[subsection amended by Act 4 of 2013]
69. Default in rendering accounts and furnishing information
70. Acceptance of benefits prohibited
71. False statementsIf any person makes any false statement or orders or allows any false statement to be made in any document which is required by this Act to be sent to the Registrar or which such person expects will be published, knowing such statement to be false, or by addition, alteration, erasure or omission, falsifies any such document, knowing that the addition, alteration, erasure or omission will cause a falsification of the document, he shall be guilty of an offence and liable to a fine not exceeding level ten or to imprisonment for a period not exceeding two years or to both such fine and such imprisonment.[section as amended by section 4 of Act 22 of 2001]
72. Misleading advertisements
73. EvidenceEvery document purporting to be certified by the Registrar to be a document deposited at his office under this Act shall, in the absence of proof to the contrary, be deemed to be such document and every document purporting to be similarly certified to be a copy of such document shall be deemed to be a true copy thereof, and shall be received in evidence as if it were the original document, unless some variation between it and the original document is proved.
74. ***[section repealed by section 4 of Act 22 of 2001].
75. RegulationsThe Minister may make regulations prescribing all matters which by this Act are required to be prescribed or which are necessary or convenient to be prescribed for giving effect to or carrying out the provisions of this Act.
76. Variation of existing mortgagesWhenever, in any mortgage bond registered before the 1st November, 1981, in favour of a society, provision is made for the society, on written notice to the mortgagor, to increase the rate of interest payable on amounts owing to or claimable by the society in terms of the mortgage bond, and—
History of this document
01 July 1965