Confusion over who will compensate Zimdollar depositors whose banks collapsed

Zimbabwe’s central bank chief John Mangudya says the Deposit Protection Corporation will compensate Zimbabwe dollar accounts that were held by financial institutions that closed post dollarisation as the apex bank moves in to restore confidence in the financial services sector.

Six banks — AfrAsia Bank Zimbabwe, Interfin, Trust Bank, Allied Bank, Capital Bank and Royal Bank — have closed operations since dollarisation in 2009, with DPC charged with compensating their account holders.

The Reserve Bank of Zimbabwe last week demonitised the Zimbabwe dollar, effectively retiring the currency. Accounts with balances of zero to Z$175 quadrillion will be paid a flat $5 while those with balances above Z$175 quadrillion will be paid the equivalent value after applying the United Nations exchange rate of USD1/Z$35 quadrillion.

“They will go through the administration unit such as the Deposit Protection Corporation. The DPC, which has all the records, will ensure that those who had money in their accounts will be given their money,” Mangudya said in an interview.

He said the Reserve Bank had created a three-month window to compensate depositors ending in mid-September in anticipation of an overwhelming response from the public. He added that most funds were being held in bank accounts as Zimbabweans ditched the local unit for stable currencies due to runaway inflation, which peaked at 500 billion percent in December 2008.

DPC chief executive John Chikura, however, said the issue would be handled by the central bank.

“That is a question that the Reserve Bank is handling. They are the ones who are acting on behalf of government. But they are being naughty because they are referring people to us without communicating with us how we are supposed to deal with this issue,” Chikura said.-The Source

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