The Sunday News
Ngonidzashe Chiutsi Business Correspondent
THE Deposit Protection Corporation says it will pay up to $9 million to depositors who were affected by the closure of AfrAsia Bank. AfrAsia’s banking licence was cancelled on Tuesday by the central bank after it was determined that the institution was no longer in a stable financial position. In a statement to Sunday Business, DPC chief executive Mr John Chikura said DPC is going to pay 18 000 depositors whose deposits were below $500 each.
The figure translates to a possible maximum of $9,15 million which DPC will pay to the affected depositors.
“At least 18 300 out of 22 000 depositors, which translate to 83 percent depositors, will be paid in full, up to $500, once they file-in their claims. Clients with balances above the insurable limit of $500 will still be paid their deposits through the liquidation process upon the realisation of assets,” he said.
Mr Chikura said the Deposit Protection Fund is able to meet the compensation requirements for small depositors of failed banking institutions as per its mandate of protecting at least 90 percent of depositors.
Mr Chikura also called on Allied Bank depositors to approach them and get compensation for their monies.
“DPC wishes to announce that following the voluntary surrender of Allied Bank’s licence on 6 January 2015 and the subsequent appointment of the Deposit Protection Corporation as Provisional Liquidator of Allied Bank on 4 February 2015 in terms of High Court Order HC180/15, compensation to all protected depositors of the institution has commenced,” said Mr Chikura.
He advised the depositors to collect deposit insurance claim forms to make the claims.
“Under its current mandate, the corporation will immediately upon verification, pay all eligible depositors up to the maximum insurable limit of $500 per depositor. Deposit balances above the insurable limit will be paid through the liquidation process upon the realisation of assets,” he said.
Mr Chikura said a public statement will be issued in due course to notify all depositors and creditors with balances above the insurable limit on the liquidation process and date of the first meeting of creditors.
The Deposit Protection Fund was established under section 66 of the Banking Act [Chapter 24:20] as read with section 13 of the Deposit Protection Corporation Act [Chapter24:29].
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.
Mr Chikura said payments to other closed banks, Genesis, Royal, and Trust depositors are still on-going and DPC has paid about 60 percent of the insured depositors.
