THE Reserve Bank has the duty to protect banks from collapsing in order to safeguard the integrity of the financial system and retain depositors’
confidence, the Deposit Protection Board (DPB) said this week.
In an interview with the Zimbabwe Independent yesterday, the DPB’s chief executive John Chikura said although indications from the central bank were that banks had a sound financial base, there should be a constant check on their liquidity.
“It’s the responsibility of the Reserve Bank to keep checking whether banks conform with prudential regulations,” Chikura said.
“In case of a crisis, the RBZ should ensure that the issue is resolved quickly without prejudicing depositors to maintain their confidence in the system.”
Chikura said it was only in an unfortunate case when a bank collapses that the DPB should come in to pay the depositors. He could not say how much would be paid out to depositors since the situation keeps changing under the prevailing economic situation.
“The last time we paid out $15 million per depositor but the situation has changed because of inflation, so the actuaries are working on the new figure,” he said.
He said the central bank had the right to close a bank after discovering irregularities but in most cases it will work with the DPB to try and resolve the crisis.
Chikura said under normal circumstances banks should pay an annual premium to the DPB as a way of protecting themselves in the event of one collapsing but because of inflation they have now resorted to quarterly premiums.
“The banks are currently paying quarterly premiums with the most risky bank paying the highest rate,” Chikura.