DPC recovers $35mln from six closed banks, depositors get $3,2mln

DPC recovers $35mln from six closed banks, depositors get $3,2mln

MUTARE, July 12 (The Source) – The Depositors Protection Corporation (DPC) has recovered $35 million from six closed banks and has so far reimbursed $3,2 million out of $6 million owed to depositors, chief executive John Chikura said on Wednesday.

The recovered funds and reimbursements cover  creditors and depositors of Afrasia Bank, Allied Bank, Interfin Bank, Trust Bank, Royal Bank and Genesis Investment Bank.

Chikura told The Source at a breakfast meeting organised by the DPC, that of the six banks, only Genesis, which surrendered its licence in June, 2012, had paid off nearly all its depositors.

He said $7,4 million of the $35 million recovered through asset disposals and loan recoveries has been paid out to creditors as at May 30 this year while $3,2 million out of a total owed of $6,4 million has been repaid to depositors at $500 per depositor as at July 10.

About 11,620 depositors out of 54,909 depositors have been paid to date. The balance of the recovered funds was repaid to other creditors, Chikura said.

He attributed the slow pace of reimbursement to litigations and legislative bottlenecks.

“The challenge is that it’s a long process to repay all the funds owed to depositors. It takes time, collections take long as well because you know we use lawyers. They follow up on debtors, some of the cases spill into courts, and you know how long court cases take, some take up to a year,” he said.

Chikura said the process would be quicker if the Reserve Bank of Zimbabwe (RBZ) is designated with a court status to immediately facilitate and authorise the compensation of depositors rather than seeking the court’s approval which takes time.

The DPC was established in 2003 through an Act of Parliament to, among other responsibilities compensate depositors in the event of a bank’s collapse. All deposit-taking financial institutions pay a premium of 0.2 percent of total deposits to the Deposit Protection Fund.

Chikura said the DPF was invested in Old Mutual and Infrastructure Development Bank of Zimbabwe (IDBZ.)

“We have invested in Old Mutual and IDBZ because we don’t want to invest in banks which we are protecting depositors against. But I won’t give you the figures but what I can tell you is that we have enough to pay depositors should any bank fail or should any banks fail today,” he said.

Editors Note: In the story “undefined” sent at: 13/07/2017 15:35

This is a corrected repeat.