The Deposit Protection Corporation of Zimbabwe (DPC) has made an upward review of the deposit protection cover by 733.33% to $1 million in order to keep pace with market developments.
Some say the low deposit protection cover in Zimbabwe is a cause for concern as it exposes depositors to significant risks in the event of bank failures or financial crises.
Established in 2003 under the Deposit Protection Act, DPC provides deposit insurance to eligible depositors in the event of a bank failure.
“With immediate effect, the Deposit Protection Cover is increased from ZWL120,000 to a maximum of ZWL1,000,000 per deposit class per contributory banking institution; and from ZWL5,000 to a maximum of ZWL100,000 per deposit class per contributory deposit taking microfinance institution,” DPC said in a notice.
“All other conditions pertaining to the calculation of the amount of protected deposit remains the same.”
DPC periodically evaluates the cover level in accordance with its normal operating procedure.
Analysts say it is important for individuals and businesses to understand the coverage limits and exclusions before making deposits with any financial institution – Harare