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Wednesday, May 22, 2024

Depositors paid US$400 000 in compensation

Story by Tichaona Kurewa, Victoria Falls Bureau Chief

The Deposit Protection Corporation (DPC) paid close to half a million United States dollars to depositors last year as compensation in respect of loss of value due to the change of currency in 2019.

Government, through Kuvimba Mining House, availed funds to the DPC for the compensation of small depositors for the loss of value incurred due to the exchange rate movement.

According to the DPC, a total of US$400 000 was paid to depositors through Deposit Taking Microfinance Institutions (DTMFIs) and the People’s Own Savings Bank (POSB).

DPC noted that after compensating POSB depositors, subsequent tranches for disbursement will be allocated to other deposit-taking institutions like commercial banks and building societies as and when additional funds are availed.

Banking experts believe the move will help in fostering confidence through encouraging savings and contributing to the country’s economic development.

Deposit protection corporations across the globe are currently building resilience for deposit insurance systems post COVID-19 and other global shocks that may come in future.

DPC is a state entity set up to compensate depositors in full or in part, for losses incurred in the event of insolvency of a contributory institution.

Among other benefits, the DPC guarantees compensation up to the cover limit for eligible deposits in the event of a bank failure.

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