DPC pay depositors $3,2m

Source: DPC pay depositors $3,2m | The Herald July 6, 2017

Enacy Mapakame Business Reporter
The Deposit Protection Corporation (DPC) has paid $3,2 million to about 21 percent of total depositors of six liquidated banks as part of its ongoing compensation process.

According to the DPC, the total number of depositors for the closed bank stood at 54 990. Of these, 11 600 depositors had been compensated.

“The aggregate figure of the amount paid out is $3,2 million to date from since we started the programme after liquidating the banks. It is a progressive figure,” said DPC chief executive officer Mr John Chikura.

Compensation of depositors of the six banks – Afrasia (Kingdom), Allied, Interfin, Trust, Royal and Genesis- is still in progress.

The DPC commenced operations on July 1, 2003 as an independent statutory body established by Government to administer the Deposit Protection Scheme.

One of its roles is to protect depositors by providing compensation in the event of bank insolvency. Eligible deposits are protected up to a maximum of $1 000 per depositor per bank (effective June 1, 2016) and up to a maximum of $250 per deposit taking micro-finance banks which is paid immediately when a member institution has been closed.

However, DPC indicated that depositors of banks which closed before June 1, 2016 are being compensated using the old cover of $500. “Depositors are guaranteed reimbursement in the event of insolvency. A DPS reduces financial uncertainty and builds confidence.

“A deposit protection scheme protects depositors, promotes financial inclusion, financial stability and ultimately economic prosperity,” said Mr Chikura.

Banks, are required to pay 0,2 percent of their deposits, per year towards the DPS. Since its formation in 2003, DPC has compensated depositors of nine failed banks and these are Century Discount House, Rapid Discount House, Sagit Finance House, Genesis Investment, Trust Bank Corporation, Royal, Interfin, Allied and Afrasia banks.

Mr Chikura however bemoaned the slow response by depositors of failed banks to claim their compensation especially in cases where small amounts were involved. This was slowing down the compensation process.

“Payments to banks that failed during the multi-currency regime are still on-going and affected depositors are being encouraged to submit claim forms,” said Mr Chikura adding DPC also was unable to verify depositor records through special examination to check whether members were meeting the requirements and conditions.