Home Business Exchange Rate Movement: US$400K Availed For Compensation Of Affected Depositors

Exchange Rate Movement: US$400K Availed For Compensation Of Affected Depositors


Exchange Rate Movement: US$400K Availed For Compensation Of Affected Depositors

The Government has availed, through Kuvimba Mining House, US$400 000 to the Deposit Protection Corporation (DPC) for the compensation of small depositors.

The funding is meant to compensate the small depositors’ money for the loss of value incurred due to the exchange rate movement as at February 20, 2019.

In November 2020, Finance Minister Professor Mthuli Ncube said the Government would compensate small and vulnerable depositors who had balances of US$1 000 and below.

This was after the loss of value they incurred when the exchange rate moved from US$1:$1 to US$1:$2,5 on February 20, 2019, with a total loss valued at US$75 million. DPC chief executive, Vusi Vuma, said in a statement:

Given the available resources, several scenarios were iteratively evaluated to identify a method that offers the best compensation to depositors…

In other words, a depositor who had US$1 000 in his or her account would get US$600 as the lost value.

Vuma added that qualifying depositors were required to submit their claims as of February 20, 2019, within a period of 12 months running from November 8, 2021, to November 7, 2022, to their respective registered DTMFIs.

The institutions include African Century Limited, Getbucks Microfinance Bank, EmpowerBank Limited, Zimbabwe Women’s Microfinance Bank, Success Microfinance Bank Limited and Lion Microfinance Limited.

He said the DTMFIs would periodically submit the schedule of claims to the DPC for verification, validation and subsequent remittance of the required payment to the DTMFIs for onward settlement to eligible depositors in US dollars without incurring transaction costs, in line with the DPC guidelines.

Vuma added that after compensating depositors of DTMFIs, subsequent tranches for disbursement would be allocated to remaining deposit-taking institutions namely commercial banks, building societies, savings banks and infrastructure banks as and when additional funds are availed.

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