The Sunday News
Ngonidzashe Chiutsi Business Correspondent
THE Deposit Protection Corporation has paid more than $473 000 to depositors of three closed financial institutions (see table below) while more claims are still being processed to ensure sanity in the sector.The body, mandated by law to protect depositors’ money locked in when financial institutions close, said customers of Genesis, Royal, and Trust banks had been paid $473 562 nearly 60 percent of the total insured deposits of $812 523 sitting in the three banks.
DPC public relations manager, Mr Allen Musadziruma, said applications for depositors with money locked in three collapsed banks that were closed after dollarisation were, however, still in progress.
He said Genesis Bank, which closed on 11 June 2012, had $11 800 in insured deposits, of which $8 371 had since been paid.
Royal Bank, which shut down on 27 July 2012, had $352 000 repaid, representing 74 percent of the insured sum.
Trust Bank Corporation which was closed on 6 December 2013 had $113 011 repaid out of the $328 000 that was insured.
“We urge depositors of these institutions who have not yet claimed to contact the DPC for reimbursement,” said Mr Musadziruma in a statement to Sunday Business last week.
Since its inception in 2003, DPC has also compensated depositors of other three failed banking institutions – Century Discount House, Rapid Discount House and Sagit Finance House.
Prior to DPC’s formation, depositors of financial institutions that closed were not compensated.
The Deposit Protection Fund was 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 Deposit Protection Corporation (DPC).
“The Corporation commenced operations on 1 July 2003, and its 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 and discount houses,” said Mr Musadziruma.
“DPC plays a key role in contributing to the stability of the financial system and enhancing depositor confidence in the financial system by establishing a framework for the resolution of failing or failed banks.”
He said soon after a bank has been closed by the RBZ, DPC was mandated to start compensating depositors up to the maximum insurable limit prevailing at the time of the closure.
“Insured deposits are covered up to $500 which is paid immediately after a bank has been closed. Any balance above $500 is paid through the liquidation process upon the realisation of assets.”
He said deposit protection was a free service for all bank depositors and no application forms were required as coverage was automatic on account opening.
