DPC to pay over 18 000 AfrAsia Bank depositors

via DPC to pay over 18 000 AfrAsia Bank depositors – The Zimbabwe Independent February 27, 2015 by Kudzai Kuwaza

THE Deposit Protection Corporation will soon pay in full 83% of the AfrAsia depositors affected by the bank’s closure by the Reserve Bank of Zimbabwe (RBZ) on Tuesday, business digest has established.

DPC chief executive John Chikura confirmed this week they would fully compensate 83% of the 22 000 depositors affected by the closure of the bank.

“At least 18 300 out of 22 000 depositors, which translate to 83%, will be paid in full up to US$500 once they file-in their claims,” Chikura said.

Chikura told businessdigest yesterday “clients with balances above the insurable limit of US$500 will still be paid their deposits through the liquidation process upon the realisation of assets”.

AfrAsia depositors with balances below US$500 will paid in full through convenient payment channels such as mobile phone and bank transfers, Chikura said.

He said DPC is in a position to meet its statutory obligation of compensating depositors in the event of any bank failure.

Payments to Allied Bank, Genesis, Royal and Trust Bank depositors are currently in progress, Chikura said. He urged clients of these institutions who have not yet submitted their claims to contact the DPC for reimbursement.

The DPC, formed in 2003, is an autonomous statutory body governed by the Deposit Protection Corporation Act (Chapter 24:29) to administer the Deposit Protection Fund and compensate depositors in the event of a bank failure.

The central bank on Tuesday cancelled struggling AfrAsia Bank Zimbabwe’s operating licence after determining that the financial institution was no longer in a sound financial condition.

“Members of the public are advised that on February 24 2015, the Registrar of Banking Institutions cancelled AfrAsia Bank Zimbabwe Ltd’s licence in terms of section 14 (4) of the Banking Act [Chapter 24:20],” the RBZ said.

The cancellation followed board resolutions by AfrAsia Zimbabwe Holdings Limited (the shareholder) and AfrAsia Bank Zimbabwe Limited (the bank) to voluntarily surrender the banking licence.”

The bank, a subsidiary of Mauritius-based AfrAsia Bank Limited (ABL), was placed under increased central bank monitoring last year as its core capital position weakened.

It is one of the four bank institutions that the central bank had of late warned were struggling due to liqidity problems and the operating envionment. Allied Bank and Capital Bank closed recently and Tetrad, which was suspended from undertaking banking activities, is on the verge of collapse.

Many banks have closed down since 1980 for different reasons, including operating environment, insolvency and mismanagement.