ZIMBABWE’S deposit protection scheme has committed to compensate depositors for Zimbabwe dollar accounts held in failed banks under liquidation as government demonitises the redundant local currency to restore confidence in the fragile financial services sector.
In June, the Reserve Bank of Zimbabwe announced that it would demonitise the local currency which became useless at the height of the country’s unprecedented economic meltdown which ended after dollarisation in 2009.
Demonetisation is the act or process of removing the legal status of a currency unit meaning that the old unit of currency must be retired or decommissioned.
The Deposit Protection Corporation (DPC) announced that it will start paying demonetisation proceeds to qualifying Zimbabwe dollar account holders for banks under liquidation from 1 December 2015 to 30 April 2016.
“DPC shall pay the equivalent US$ amount for each account balance as at 31 December 2008 converted by the UN exchange rate of US$1 to Z$35 Quadrillion,” reads a notice on the DPC website.
“ Accordingly, DPC shall pay any person who was a holder of a Zimbabwe dollar denominated bank account for AfrAsia Bank Zimbabwe Limited (In Liquidation) and Allied Bank Limited (In Liquidation) as at 31 December 2008 ….”
Before 2009, a number of banks collapsed. The post-dollarisation period has seen eight banks — Genesis, Capital, Interfin, AfrAsia, Tetrad, Royal, Trust and Allied — going under prejudicing depositors of their hard-earned cash and destroying trust in banks, key financial intermediaries.-Staff Writer