Conrad Mwanawashe Business Reporter—
THE Deposit Protection Corporation has paid out $2,7 million to depositors of six failed banks in the last three years but more funds are available to pay out depositors who are yet to present claims against the banks. The $2,7 million was paid out to depositors of Royal, Trust, Genesis, Allied, Interfin and Afrasia Banks and more payments are still in progress.
In written responses DPC public relations manager Mr Allen Musadziruma said insured amount paid to date were: Royal Bank – 75 percent; Trust Bank – 39 percent; Genesis Bank – 73 percent; Allied Bank – 34 percent; Interfin Bank – 20 percent and AfrAsia Bank – 48 percent.
“It means that out of the insured amount, DPC has paid 75 percent of the value of deposits and not number of depositors. We track payments mostly by value of deposits,” said Mr Musadziruma. The insured amount or guaranteed amount of $500 is paid out immediately when one submits a claim form.
“So when a bank is closed, all clients will be paid up to a maximum of $500 immediately when they submit a claim form. In the event a client has more than $500, we will pay them the initial $500 immediately and the balance will still be paid via the liquidation process on a pro-rata basis.
“Efforts are being made to contact clients of these closed banks to submit their claim forms as the funds are available and they are guaranteed to be paid up to a maximum of $500 once they submit the claim form,” said Mr Musadziruma. Any balance above the insurable limit is paid through the liquidation process on a pro-rata basis. Depositors will still be reimbursed balances above $500 through the liquidation process on a pro-rata basis.
The DPC fund is currently invested in highly liquid and secure investments. Payments are made through bank transfers and through mobile money platforms, EcoCash and Telecash as a way of bringing convenience to clients when making reimbursements. Deposit protection is free for all bank depositors. By merely opening a bank account with any member institution in Zimbabwe, a person
will be covered by DPC up to the maximum insurable limit currently set at $500 per depositor per bank. Depositors do not need to pay anything to us or to their bank, they do not need to complete any application form(s) to be covered by us as coverage is automatic on account opening.
Since inception in 2003, a total of 12 977 depositors of nine failed banking institutions which were subjected to liquidation have benefited from the Deposit Protection Scheme. Between 2004 and 2006 DPC paid out a total of Z$11,6 million to depositors of Sagit Finance House, Century and Rapid Discount Houses.
In view of the current legislative framework, no compensations were made to depositors of failed banking institutions whose resolution methods did not entail liquidation, which include NDH; High Veld; Intermarket Bank; Intermarket Discount House; Original Trust Bank, Royal Bank, and Barbican Bank whose assets were sold to ZABG in 2005.
Capital Bank has also failed but has not yet been placed under a provisional or final liquidation order. The Deposit Protection Fund is established under Section 13 of the Deposit Protection Corporation Act [Chapter 24:29]. The primary objective of the Fund is to compensate depositors in full or in part, for losses incurred in the event of insolvency of a contributory institution. The Fund is vested in and administered by the DPC.
The Corporation’s primary objective is to provide deposit protection to depositors in institutions licensed to operate banking or finance business in Zimbabwe such as commercial banks, merchant banks, building societies, finance houses, discount houses and deposit-taking micro-finance banks.