Collapsed banks yet to compensate depositors

via Collapsed banks yet to compensate depositors – NewsDay Zimbabwe 8 October 2014 by Victoria Mtomba

DEPOSITORS, employees and creditors of collapsed banks have to wait longer until the courts confirm the Deposit Protection Corporation (DPC) as the liquidator, the corporation’s chief executive John Chikura said yesterday.

Speaking on the sidelines of the Workshop for Banks on Publicity Requirements of the Deposit Protection Scheme, Chikura said courts need to understand that banks deal with people’s money and should expedite the process.

“Currently the appointment of the corporation as a liquidator is still subject to confirmation by the courts. Proposed amendments have been submitted to the Ministry of Finance,” Chikura said.

Chikura said judgment had not been made on Royal Bank since December last year. He also added that Trust Bank was still awaiting its fate from the courts.

“What we want is that if a bank is closed and the Reserve Bank of Zimbabwe appoints DPC as a liquidator, that must be regarded
as equivalent as that of the court. Depositors, some who have money that is above $500, have not been given their money.
Employees and the creditors are not being paid as they wait for the courts,” he said.

Chikura said there are 22 banks in total and as at June 30 2014, 11 institutions have been contributing with a $1,2 billion deposit and were on DPC’s watch list.

“At a cover level of $500, DPC’s exposure was $52,3 million, affecting 770 053 depositors (54%). Six of the 11 institutions on the watch list are in a distressed financial condition. DPC’s exposure to distressed contributory institutions was $16,9 million, representing 138 186 accounts,” he said.

“Previously we have been investing in RBZ treasury bills and they have adopted to invest in Old Mutual. The reason we are investing outside the banking sector is we are diversifying the risk. It is considered best practice. We don’t invest in member banks.”

Chikura said the deposit protection fund had $14 million which represents 19% of the $76 million that was required. He said the funds were not adequate.

“The current exposure level calls for a robust deposit insurance fund capable of instilling confidence in the banking sector,” Chikura said.

DPC was set up in 2003 and has compensated depositors of failed banking institutions which were subjected to liquidation. The institutions include, among others, Century Discount House, Rapid Discount House, Sagit Finance House and Genesis Investment Bank.

Chikura said payments to Genesis, Royal, and Trust depositors were still ongoing.

He said some of the financially distressed banks were not paying DPC premiums.

Meanwhile, banking institutions are expected to publicise the Deposit Protection Scheme.

COMMENTS

WORDPRESS: 3
  • comment-avatar
    revenger avenger 8 years ago

    Inept gono reserve bank. They will never ever be refunded sadly by the looting shefus. Our pensions were also stolen by old mutual fidelity first life !!!!!!!!!!

  • comment-avatar
    Oliver Mudzana 8 years ago

    I am so interested in this dpc because I am a depositor who lost money when first national building society fnbs collapsed. I made a follow up with the curator, David Scott who was said to be in Mt pleasant by then but nothing materialised up to now. How can this amount be recovered.

    • comment-avatar
      Don Cox 8 years ago

      “How can this amount be recovered.”

      It can’t.

      Better keep your savings in gold, well hidden.