DEPOSIT Protection Corporation (DPC) has paid US$28,6 million to creditors of six failed banks under liquidation, businessdigest has learnt.
The corporation was appointed liquidator of six failed contributory institutions currently in final liquidation.
“On the liquidation front, about US$28,6 million has been paid out as dividends to creditors of the six failed contributory institutions under liquidation,” DPC public relations manager Allen Musadziruma told businessdigest this week.
He further revealed that they have paid US$3,6 million to depositors of the six failed banks, among them Royal and AfrAsia.
“To date, US$3,6 million has been disbursed to the depositors of the six failed banking institutions, namely Royal, Trust, Genesis, Allied, Interfin and AfrAsia out of the Deposit Protection Fund (DPF) paid against an exposure of US$6,4 million at a cover level of US$500 per depositor per bank. The said payment represents 56,3% compensation of the insured amount,” Musadziruma said.
“Payments for depositors of these institutions, except Genesis and Royal, are still ongoing and we urge those who have not claimed their money from DPC to do so. Measures have also been put in place to reach out to depositors who have not yet received compensation from the Deposit Protection Fund.”
DPC payments to depositors take place on two fronts: the Deposit Protection Fund (DPF), up to the prevailing cover level, currently US$1 000, which is for new bank closures effective June 1, 2016, and liquidation dividends on a pro-rata basis, depending on debt recoveries and asset realisation.
This means that in the event of bank failure, every client with a deposit balance equal to or below US$1 000 is guaranteed to receive full compensation of the amount in the bank account at the time of bank closure, provided one submits a duly completed claim form. Any outstanding deposit balance above the cover limit of US$1 000 is payable through the liquidation process on a pro-rata basis.
The DPC, formed in 2003, is an autonomous statutory body governed by the Deposit Protection Corporation Act (Chapter 24:29) to administer the Deposit Protection Fund and compensate depositors in the event of bank failure.