DPC to insure forex accounts
THE Deposit Protection Corporation (DPC) has established a deposit insurance facility for foreign currency denominated accounts (FCAs) with a maximum cover level of US$1 000 per deposit class for each bank.
DPC’s primary objective is to provide deposit protection to depositors in deposit taking institutions licensed by the Reserve Bank of Zimbabwe.
In the event of failure of a member institution, DPC will compensate depositor’s part or all of their funds that were in the closed member institution up to the maximum cover limit prevailing at the time of closure.
However, following the separation of deposit accounts into Zimbabwe dollar and nostro FCAs, there had been no explicit deposit protection of nostro FCAs in Zimbabwe.
“To date, the corporation has been in consultation with stakeholders including the Bankers Association of Zimbabwe, the Reserve Bank of Zimbabwe, Ministry of Finance and Economic Development, and the Multi-disciplinary Financial Stability Committee to protect the said deposits,” Vusilizwe Vuma, the Corporation’s chief executive said.
According to Mr Vuma, the deposit protection maximum cover level shall be US$ 1000 per deposit class per banking institution and US$500 per deposit class per deposit taking micro-finance institution with effect from 1 January 2022.
He noted that the deposit protection of
FCAs or nostro FCAs shall not be applied retrospectively, therefore shall not apply to any liquidation that is currently underway.
Since its inception in 2003, DPC compensated depositors of nine failed banking institutions which were subjected to liquidation, namely Century Discount House; Rapid Discount House; Sagit Finance House; Genesis Investment Bank; Royal Bank; Trust Bank Corporation; Interfin; Allied Bank; and AfrAsia Bank.
As at December 2018, total liabilities of banking institutions under liquidation stood at $284 million against total assets of $93,4 million, leaving a gap of $190,6 million.
Presently, DPC’s cover level stands at ZWL$1 000 per depositor per deposit type per contributory banking institution (CBI).