The Zimbabwe government has refused Barclays Bank Zimbabwe the permission to transfer its local custody business to Standard Chartered Bank because it is in breach of the indigenization law, local media reported on Monday.

Indigenization and Empowerment minister Saviour Kasukuwere said he refused to grant the bank the permission because doing so was against the country's laws.

"It is not like I do not want them to transfer the business to Standard Chartered, but it is against the laws of this country," Kasukuwere told the Herald newspaper.

"What they did was like approaching courts of law with dirty hands," he added.

Barclays PLC owns 67 percent of the Zimbabwean subsidiary and the subsidiary should trim its shareholding to 49 percent and below, according to Zimbabwe's empowerment regulations that came into effect in March this year.

The regulations stipulate that at least 51 percent shareholding in foreign owned companies with a net asset value of 500 000 U.S. dollars should be in the hands of indigenous Zimbabweans.

Companies have been given five years to comply with the law.

Barclays Bank announced in April its intention to transfer the local custody business to Standard Chartered Bank after Barclays PLC sold its African custody business to Standard Chartered Group in 1998.

Custody business entails the provision of financial services, usually to institutional investors relating to foreign exchange, safekeeping of certificates for securities issued in global markets, dealing with tax issues, collecting dividends, valuation of investments and settling of transactions.

By Special correspondent