Source: DPC pays out $3m since 2012 – NewsDay Zimbabwe July 12, 2016
THE Deposit Protection Corporation (DPC) has so far paid over $3 million to 11 300 depositors of six banks that were closed since 2012, an official has said.
BY TARISAI MANDIZHA
Since 2012, DPC has been making payments to depositors of six closed banking institutions, namely Genesis, Royal, Trust, Interfin, Allied and AfrAsia under the Deposit Protection Fund (DPF).
DPC chief executive officer, John Chikura said compensation of deposits via the DPF and the liquidation process was ongoing and required depositors and creditors, who have not already done so, to submit the required paperwork.
“Since 2012, DPC has been making payments to depositors of six closed banking institutions, namely Genesis, Royal, Trust, Interfin, Allied and Afrasia. To date, over $3,11m has been paid out to over 11 300 depositors out of the Deposit Protection Fund, while $27,5m has been recovered via the liquidation process,” he said.
Chikura said investigations into the affairs of the failed banking institutions attribute their collapse to, among other issues, poor corporate governance practices, insider loans, non-compliance with applicable laws and regulations, inappropriate business models and poor risk management practices, which in turn manifest as credit (high volumes of non-performing loans), liquidity and ultimately solvency (low capitalisation) challenges.
In 2015, DPC said it had put seven banks under its watchlist as at May 31. Four of them were in a distressed financial condition, that is, had Camels ratings of “4” or “5”.
Analysts say the collapse of banking institutions was a deterrent in the drive to boost banking sector confidence and increased deposits amid claims that over $3 billion was circulating outside the banking channels.
Government has responded by amending the Banking Act to make directors of collapsed banks liable.
The amendments also seek to enhance frameworks for corporate governance, problem bank resolution, prudential supervision and regulation, and foster financial stability and public confidence in the banking system.
According to the new Banking Act, which came into effect in May, the Reserve Bank of Zimbabwe was given more latitude to tighten bank supervision monitoring and control individual or bank holding shareholders’ influence on banks.
Part of the provisions of the amended Banking Act now prohibit individuals or corporate bodies from holding more than 25% of voting shares in banks or their holding companies.
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