Deposit protection for FCAs on the cards
Harare (New Ziana) – The Deposit Protection Corporation (DPC) will start offering insurance cover for Foreign Currency Denominated Accounts (FCAs) with effect from December 31 this year as part of efforts to further entrench public confidence in the local banking sector.
The DPC said following the separation of depositor accounts into Zimbabwe dollar and Nostro FCAs there has been no explicit deposit protection provisions for Nostro FCAs in the country.
DPC chief executive officer Vusi Vuma said the move was in line with the DPCs statutory responsibility and international best practices.
He said the DPC had consulted various stakeholders including the Bankers Association of Zimbabwe, the Reserve Bank of Zimbabwe, the Ministry of Finance and Economic Development and the Multi-disciplinary financial stability committee to protect foreign currency deposits.
“In view of the foregoing, the public is further advised (that) the deposit protection maximum cover level shall be USD1000 per deposit class per banking institution and USD500 per deposit class per deposit-taking micro-finance institution with effect from 1 January, 2021,” he said.
“Compensation to FCAs holders shall be in foreign currency in the event of occurrence of a compensation event or bank failure. Deposit protection of FCAs or Nostro FCAs shall not be applied retrospectively. It therefore shall not apply to any liquidation that is currently underway.”
Deposit protection is a scheme established by government to protect depositors against the loss of their insured deposits placed with member institutions licenced to operate banking or finance business.
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