$3m paid out to failed banks clients…Deposit Protection Corporation invites more outstanding claims

Oliver Kazunga Senior Business Reporter
THE Deposit Protection Corporation (DPC) has in the past four years paid over $3,1 million to depositors of failed banks. In an interview, DPC public relations manager Allan Musadziruma said more funds are available to pay out depositors who are yet to present claims against the banks. He said at present they are dealing with paying depositors from six failed banks namely Royal, Trust, Genesis, Allied, Interfin and AfrAsia.

“We’ve so far paid over $3,1 million to depositors who lost their money following the closure of six banks over the years.

“Payment of the depositors is a continuous process and we’re encouraging depositors from failed banks to submit their claim forms to the DPC and payment will be done electronically through platforms such as bank transfers and mobile money transfer services,” Musadziruma said.

He said the current cash shortages being experienced have not affected the payment of depositors by DPC as the corporation’s fund is invested in highly liquid and secure investments.

“The cash shortages being experienced haven’t affected payment of depositors. As DPC we’ve got the money to payout insured deposits after a bank failure and through electronic platforms all things being equal (without errors on submitted claim forms) we’re able to pay depositors within a week of submission of the claim forms,” said Musadziruma.

The Reserve Bank of Zimbabwe has blamed shareholder delinquency and poor corporate governance by directors and senior managers of banking institutions for bank failures following the introduction of multi-currency system February 2009.

When a bank shuts down, all clients are paid a maximum of $500 immediately when they submit a claim form. And in the event a client has over $500 in the account, the DPC pays an initial deposit of $500 while the balance is paid via the liquidation process.

This means any balance above the insurable limit through the liquidation process on pro-rata basis. This also means depositors would be reimbursed balances above $500 through the liquidation process on pro-rata basis.

Since its inception in 2003, over 13,000 depositors of nine failed banks that were subjected to liquidation have benefited from the Deposit Protection Scheme.

DPC’s primary objective is to offer deposit protection to depositors in institutions licenced to operate banking or finance business in Zimbabwe such as commercial banks, merchant banks, building societies, finance houses and deposit-taking microfinance institutions.

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