The Reserve Bank of Zimbabwe has cancelled the license of Capital Bank. This brings to the fore doubts about the stability of indigenously-owned banks in the country. The country’s financial services sector has been hard-hit by a persistent liquidity crunch and depositor flight, with indigenously owned banks hardest hit. The cancellation of Capital Bank’s licence could stoke further negative sentiment over the stability of the local banking sector. A report by the Industrial Psychology Consultants released this week established that Zimbabweans favour international banks to handle their funds. South Africa’s Standard Bank unit in Zimbabwe, Stanbic, and the British-owned Standard Chartered and Barclays banks were rated as the most favoured international banks by the report. The main reason given for the licence cancellation was under-capitalisation. Capital Bank’s major shareholder, the National Social Security Authority, is no longer willing to inject additional capital into the bank.