The Deposit Protection Corporation (DPC) says the explicit deposit protection of Foreign Currency Denominated Accounts (FCAs) or Nostro FCAs will effectively start from 31 December 2021.
Since the separation of depositor accounts into Zimbabwe Dollar (ZWL) and Nostro FCAs, there has been no explicit deposit protection of Nostro FCAs in the country despite the government promising to provide a Statutory Instrument to further protect nostro accounts for individuals and the private sector.
However, DPC has been in consultation with stakeholders including the Bankers Association of Zimbabwe (BAZ), the Ministry of Finance and Economic Development and the Multi-disciplinary Financial Stability Committee to protect the said deposits.
In a circular 1 of 2021 seen by this publication, DPC chief executive officer Vusilizwe Vuma said the deposit protection maximum cover level shall be USD1000 per deposit class per banking institution and USD500 per deposit class per deposit taking microfinance institution with effect from 1 January 2022.
“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,” he said.
As a result of lack of confidence, people are still very reluctant to put their hard earned US dollars into the financial system. This is one of the major glaring holes that prompts people to risk being robbed at home than to trust the banks – Harare