THE Deposit Protection Corporation (DPC) has increased to a maximum of $1 million, up from $120 000, the amount that banks contribute as cover in the unlikely event of failure or closure.
The government established the DPC in 2003 for purposes of compensating the small and financially unsophisticated depositors to the extent of protected deposits in the unlikely event of a bank failure as well as to contribute towards the stability and public confidence in the country’s financial system.
All banks are compelled to be members of the corporation, while all account holders automatically become beneficiaries once they open an account with any bank. The payments are based on two fronts, namely the initial specified cover and dividends from liquidation of assets which are made on a pro-rata basis.
In a statement, DPC acting chief executive Gift Chirozva said the corpo[1]ration reviews the cover level from time to time as per its standard operating practice. “Pursuant to provisions of section 41 of the Deposit Protection Corporation Act (Chapter 24:29), all contribu[1]tory institutions are advised as stated hereunder.
“With immediate effect, the Deposit Protection Cover is increased from $12O OOO to a maximum of $1 OOO OOO per deposit class per contributory banking institution; and from $5 OOO to a maximum of $1OO OOO per deposit class per contributory deposit taking microfinance institution,” he said.— New Ziana