Bank closures affect 55 000 depositors

Source: Bank closures affect 55 000 depositors | The Herald September 19, 2016

An estimated $186 million in deposits was locked up in six failed banks in the past five years affecting about 55 000 depositors, latest figures from the Reserve Bank of Zimbabwe (RBZ) show.

Six banks, namely Royal, Trust, Genesis, Allied, Interfin and AfrAsia lost their licenses in different periods since 2013 and are at various stages of liquidation.

The RBZ said closure of the “weak banks” was part of measures “to promote financial sector stability and restore confidence in the banking sector.”

In terms of existing laws, depositors are entitled to get an immediate pay out of up to $1 000 from their accounts from the Deposit Protection Corporation (DPC) when a bank closes.

The figure was recently reviewed upwards from $500.

Data from the RBZ shows that 11 310 affected depositors have to date only recovered $3,1 million through the DPC.

With $500 being paid per depositor, the DPC’s immediate exposure was $6,4 million and about half of that has been paid.

The DPC is always urging account holders of closed banks to claim their funds.

Early this month, the DPC told New Ziana it had managed to recover about $29 million through debt collections and auctions of properties belonging to the failed banks.

Information from the RBZ also shows that a seventh financial institution, Capital Bank, whose license was cancelled in 2014, still had its case lodged at the High Court.

This was after the bank’s main shareholder, the National Social Security Authority pushed for its liquidation, a move that other shareholders opposed.

“The parties await allocation of a set down date for the hearing of the application by the High Court,” the central bank said. – New Ziana.