The Sunday News
Judith Phiri, Business Reporter
THE Government has started compensating small and vulnerable depositors for their loss of value due to exchange rate movements.
In a statement, Deposit Protection Corporation (DPC) acting chief executive officer Mr Gift Chirozva said the initiative applies to depositors who had balances of $US1 000 and below.
“In the 2021 National Budget Statement presented in November 2020, the Honourable Minister of Finance and Economic Development (Professor Mthuli Ncube) announced that Government, through the Deposit Protection Corporation would compensate small and vulnerable depositors who had balances of US$1 000 and below, for the loss of value incurred due to the exchange rate movement from US1: RTGS$1 to USD1: RTGS$2.5, as at 20 February 2019, with resources equivalent to US$75 million,” he said.
He said Government has now availed, through Kuvimba Mining House, the sum of US$400 000 to the DPC for distribution to vulnerable depositors.
Mr Chirozva said given the available resources, several scenarios were iteratively evaluated to identify a method that offers the best compensation to depositors.
In terms of implementation arrangements, he said: “The DPC wishes to advise the banking public that in the meantime, the initial tranche of US$400 000 will be allocated to eligible depositors who had balances of US$1 000 and below in the Deposit-Taking Microfinance Institutions, to pay for the loss of deposit value occasioned by exchange rate movement from US$1: RTGS$1 to US$1: RTGS$2.5 as at 20 February 2019.”
Mr Chirozva said in other words, a depositor who had US$1 000 in his or her account would get US$600 being the total lost value.
He said accordingly, qualifying depositors were advised to submit their claims as at 20 February 2019 before the deadline of 30 June 2022 to their respective registered Deposit-Taking Microfinance Institutions namely: African Century Limited, Getbucks Microfinance Bank, Empower Bank Limited, Zimbabwe Women’s Microfinance Bank, Success Microfinance Bank Limited, and Lion Microfinance Limited.
“The Deposit-Taking Microfinance Institutions will periodically submit the schedule of claims to the DPC for verification, validation, and subsequent remittance of the requisite payment to the Deposit-Taking Microfinance Institutions for onward settlement to eligible depositors in USD without incurring transaction costs.”
Mr Chirozva said the Ministry of Finance and Economic Development, DPC, the Reserve Bank of Zimbabwe and the banking sector have reached an agreement in that regard.
He said after compensating depositors of Deposit-Taking Microfinance Institutions, subsequent tranches for disbursement would be allocated to remaining deposit-taking institutions namely commercial banks, building societies, savings bank, and infrastructure bank, as and when additional funds are availed.
“For the avoidance of doubt, the window for compensation of eligible depositors of Deposit-Taking Microfinance Institutions closes on the 30th of June 2022.”