HomeBusiness DigestDPC to pay US$1,3m to Allied depositors

DPC to pay US$1,3m to Allied depositors

THE Depositor Protection Corporation (DPC) will immediately pay out US$1,3 million of the US$14,7 million owed to depositors of Allied Bank with the rest to be settled after the liquidation of the bank’s assets, businessdigest has established.

Kudzai Kuwaza

The central bank cancelled the operating licence of Allied Bank, owned by Transport minister Obert Mpofu, last week saying the institution was no longer in a safe condition.

“The Reserve Bank of Zimbabwe (RBZ) has determined that the banking institution is no longer in a safe and sound condition in that the institution is grossly undercapitalised and is facing chronic liquidity challenges,” the Registrar of Banking Institutions said.

The RBZ said the action was in the best interests of the banking institution, its depositors and creditors, and the banking sector in general.

DPC CEO John Chikura said the organisation has the capacity to pay affected depositors up to the maximum assured limit of US$500 with the remainder to be paid out after the liquidation of the bank’s assets.

“DPC expects to pay a total of US$1,3 million to Allied Bank’s depositors as deposit insurance payments,” Chikura said. “DPC has the capacity to pay all depositors of Allied Bank up to the maximum insured limit of US$500 per depositor per account. Deposit balances above the insurable amount of US$500 will be paid through the liquidation process upon realisation of assets.”

Chikura expressed concern over the continued closure of banks, saying this would have an adverse effect on the stability of the banking sector as well as growth of the insurance fund.

“An increase in bank failures negatively affects the stability of the banking sector and the growth of the deposit insurance fund,” Chikura said.

He revealed that the DPC had paid more than half of the depositors of closed Genesis and Royal banks.

“We have made significant progress on the payments to former depositors of both banks and payments are still in progress. For Genesis, we have so far paid 68% of the depositors while for Royal Bank we have paid 57% of the total depositors,” he said.

“The main reason why some of the depositors haven’t been paid is that quite a significant number of depositors have balances below US$5 and hence find it uneconomic to claim their money. We have, however, tried a number of ways to reach out to the affected depositors, including calling the depositors, sending money via mobile money payments, as well as media publications inviting depositors to come and claim their money.”

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