By ETimes

The government has availed through Kuvimba Mining House US$400 000 to the Deposit Protection Corporation (DPC) for the compensation of small depositors for the loss of value incurred due to the exchange rate movement as at 20 February 2019.

At the time, it destroyed billions of dollars in savings and wreaked havoc on pension funds.

Zimbabwe has been trying to promote the local currency since it was temporarily abandoned in 2009 in favor of the US dollar owing to hyperinflation

Previously the southern African nation used a pegged exchange rate of 1:1 between the US dollar and the Zimbabwean dollar. However, many people opted to keep US dollars which they bought on the black market.

As a result, the government was sued for unilaterally declaring the county’s new currency to be the equivalent of the US dollar.

In November 2020, Treasury chief Mthuli Ncube announced that the Government would compensate small and vulnerable depositors who had balances of US$1000 and below for the loss of value incurred during the exchange rate movement from US$1:RTGS$1 to US$1:RTGS$2.5 as at 20 February 2019, with resources equivalent to US$75 million

“Given the available resources, several scenarios were iterativley evaluated to identify a method that offers the best compensation to depositors,” stated DPC.


On implementation arrangements, DPC advised the banking public that in the meantime, the initial tranche of US$400 000 will be allocated to eligible depositors who had funds in the Deposit Taking Microfinance Institutions (DTMFIs) whose depositors will receive compensation to the full extent of their respective loss of value.

“In other words, a depositor who had US$1000 in his or her account would get US$600 as the lost value.”

Qualified depositors are required to submit their claims as at 20 February 2019 within a period of 12 months running from 8 November 2021 to 7 November 2022 to their respective registered DTMFIs which include African Century Limited, Getbucks Microfinance Bank, EmpowerBank Limited, Zimbabwe Women’s Microfinance Bank, Success Microfinance Bank Limited and Lion Microfinance Limited.

The DTMFIs will periodically submit the schedule of claims to the DPC for verification, validation and subsequent remittance of the requisite payment to the DTMFIs for onward settlement to eligible depositors in USD without incurring transaction costs, according to the DPC.

It said the Treasury, central bank and the banking sector have reached an agreement in that regard.


“After compensating depositors of DTMFIs, subsequent tranches for disbursement would be allocated to remaining deposit taking institutions namely commercial banks, building societies, savings bank and infrastructure bank as and when additional funds are availed,” it said.

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 202, DPC 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.-HARARE



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