DPC to compensate small depositors
THE Government has availed, through Kuvimba Mining House, US$400 000 to the Deposit Protection Corporation (DPC) for the compensation of small depositors.
The funding is meant to compensate the small depositors money for the loss of value incurred due to the exchange rate movement as at February 20, 2019.
In November 2020, Finance Minister Professor Mthuli Ncube said the Government would compensate small and vulnerable depositors who had balances of US$1 000 and below.
This was after the loss of value they incurred when the exchange rate moved from US$1:$1 to US$1:$2,5 on February 20, 2019, with total loss valued at US$75 million.
“Given the available resources, several scenarios were iteratively evaluated to identify a method that offers the best compensation to depositors,” DPC chief executive, Vusi Vuma, said in a statement.
He said in the meantime, the initial tranche of US$400 000 would be allocated to eligible depositors who had funds in the Deposit Taking Microfinance Institutions (DTMFIs), whose depositors will receive compensation to the full extent of their respective loss of value.
“In other words, a depositor who had US$1 000 in his or her account would get US$600 as the lost value,” he noted.
Mr Vuma indicated that qualifying depositors were required to submit their claims as at February 20, 2019 within a period of 12 months running from November 8, 2021 to November 7, 2022 to their respective registered DTMFIs.
The institutions include African Century Limited, Getbucks Microfinance Bank, EmpowerBank Limited, Zimbabwe Women’s Microfinance Bank, Success Microfinance Bank Limited and Lion Microfinance Limited.
He said the DTMFIs would periodically submit the schedule of claims to the DPC for verification, validation and subsequent remittance of the requisite payment to the DTMFIs for onward settlement to eligible depositors in US dollars without incurring transaction costs, in line with the DPC guidelines.
He indicated that the Treasury, central bank and the banking sector had reached an agreement in that regard.
“After compensating depositors of DTMFIs, subsequent tranches for disbursement would be allocated to remaining deposit taking institutions namely commercial banks, building societies, savings bank and infrastructure bank as and when additional funds are availed,” Mr Vuma said.
Since the separation of depositor accounts into Zimbabwe dollar and nostro foreign currency accounts (FCAs), there had been no explicit deposit protection of nostro FCAs in the country with the Government promising to provide a Statutory Instrument to further protect nostro accounts for individuals and the private sector.
However, DPC has been in consultation with stakeholders including the Bankers Association of Zimbabwe (BAZ), the Ministry of Finance and Economic Development and the Multi-disciplinary Financial Stability Committee to protect the said deposits. In a circular 1 of 202, DPC said the deposit protection maximum cover level shall be US$1 000 per deposit class per banking institution and US$500 per deposit class per deposit taking microfinance institution with effect from January 1, 2022.-The Herald
