Deposit Protection Corporation
Background
The Deposit Protection Corporation (DPC) is a statutory body previously known as the Deposit Protection Board established on 1 July 2003 in terms of the Banking Act [Chapter 24:20] as read with Banking (Deposit Protection) Regulations, Statutory Instrument 29 of 2003.
The Corporation assumed the new name in terms of the Deposit Protection Act [Chapter 24:29], No. 7/2011 which came into effect on 16 March 2012 which also resulted in the Corporation’s mandate being expanded to include responsibilities such as the resolution of failing or failed banks, judicial management and liquidation of closed banks. The enhanced mandate has enabled DPC to effectively carry out its objectives in line with international best practice.
The Corporation’s primary objective is to provide deposit protection to depositors in deposit taking institutions licensed by the Reserve Bank of Zimbabwe under the Banking Act (Chapter 24:20), Building Societies Act (Chapter 24:02), People’s Own Savings Bank (POSB) Act (Chapter 24:22), Infrastructure Development Bank of Zimbabwe (IDBZ) Act (Chapter 24:14) and Micro-finance Act (Chapter 24:29) such as commercial banks, merchant banks, building societies, discount houses, finance houses, deposit-taking micro-finance institutions, People’s Own Savings Bank (POSB) and Infrastructure Development Bank of Zimbabwe (IDBZ). In the event of a bank failure, DPC will compensate depositors part or all of their funds that were in the closed bank up to the maximum cover limit prevailing at the time of bank closure.
Currently, the cover limit is set at $1,000 (One Thousand United States Dollars) per depositor per bank and $250 (Two Hundred and Fifty United States Dollars) for deposit-taking micro-finance institutions.
The Deposit Protection Fund
The Deposit Protection Fund is established under Section 13 of the Deposit Protection Corporation Act [Chapter 24:29]. The primary objective of the Fund is to compensate depositors in full or in part, for losses incurred in the event of insolvency of a contributory institution. The Fund is vested in and administered by the Deposit Protection Corporation (DPC).
The creation of the Fund is a Government policy in response to a growing need to moderate instability in the banking sector and to protect the public against the worst consequences of bank failure. Statutory Instrument 156 of 2013 outlining the rules and regulations governing the operation of the Deposit Protection Fund is in place. The statute specifies the prescriptions to be made by the Board regarding the amount of contributions payable by members, the amount of compensation paid to depositors in the event of bank failure, and the information to be submitted to the Board by contributory institutions. It also specifies how the Scheme will be funded and the types of deposits eligible for cover.
The Fund offers limited coverage and guarantees that depositors will be paid in full up to the insured amount in the event of failure of a member institution. Currently, the prescribed maximum deposit compensation covers in full over 92% of all depositors operating accounts in contributory institutions. For more information on deposit protection, cover limit, deposits covered and excluded from cover, please click here.
Organizational Structure
In order to ensure the Deposit Protection Corporation’s mandate is delivered and public policy objectives achieved, DPC employs well trained, experienced and customer-centric staff.
