DPC reviews deposit protection cover

The Deposit Protection Corporation has reviewed upwards the Zimbabwean dollar deposit protection cover with effect from June 23 in line with rising inflation.

According to the DPC, deposit protection cover on the local currency has increased 733 percent to $1 million from $120 000.

“In line with provisions of Section 41 of the Deposit Protection Act (Chapter 24.29) and with immediate effect, the Deposit Protection cover is increased from ZWL120 000.00 (One hundred and twenty thousand Zimbabwe dollars) to a maximum of ZWL1 000 000.00 (One million Zimbabwean dollars),” said DPC.

In terms of foreign currency denominated accounts, the deposit protection cover remains unchanged.

“The deposit protection maximum cover for Foreign Currency Denominated Accounts (FCAs) remain unchanged as USD1000.00 (One Thousand United States Dollars) in line with the Deposit Protection Corporation’s Circular 1 of 2021.

“All other conditions pertaining to the calculation of the amount of the protected deposit remain the same. The corporation reviews the cover level from time to time as per its standard operating practice,” said the DPC.

The country’s banking sector has suffered confidence issues with local depositors following a myriad of events, key among them the banking sector crisis of 2004 that saw several local banks placed under curatorship. Additionally, during the hyperinflationary period of 2008/9, depositors could not access their funds from banks while savings and pension values were lost as the economy adopted a multi-currency system.

Deposit protection is a scheme established by the Government to protect depositors against the loss of their money placed with banks in the event of bank failure.-ebusinessweek