Business Reporter
Harare \u2014 Zimbabwe has formally liquidated four banks that collapsed during the country\u2019s financial crisis between 2004 and 2008, with authorities recovering ZiG9.4 million (US$9.4 million) in residual assets to compensate affected depositors.<\/p>\n\n\n\n
The Deposit Protection Corporation (DPC) confirmed the closure of Afrasia Bank, Interfin Bank, Allied Bank, and Trust Bank, marking the end of a years-long liquidation process.<\/p>\n\n\n\n
The recovered funds\u2014comprising cash, treasury bills, and property\u2014will be distributed to creditors and depositors.<\/p>\n\n\n\n
Liquidation Process Concluded<\/p>\n\n\n\n
Hopewell Zinyau, CEO of the DPC, announced the completion of the liquidation at the corporation\u2019s annual general meeting last week.<\/p>\n\n\n\n
\u201cDuring the period under review, the corporation continued to effectively discharge its mandate as liquidator for five closed banks through asset recoveries and the disbursement of liquidation dividends,\u201d Zinyau said.<\/p>\n\n\n\n
\u201cFour liquidation assignments were successfully concluded, with total recoveries amounting to ZiG9.4 million.\u201d<\/p>\n\n\n\n
Bank liquidation involves permanently shutting down a financial institution, selling its assets, and using the proceeds to settle outstanding liabilities. Depositors typically receive insured amounts via cheque payments.<\/p>\n\n\n\n
Strengthening Deposit Protection<\/p>\n\n\n\n
The DPC, established under the Deposit Protection Corporation Act, safeguards depositors when banks fail. Zinyau revealed that the Deposit Protection Fund grew by nearly 10% in the first quarter of 2025, reaching US$16.7 million\u2014up from US$15.2 million at the end of 2024.<\/p>\n\n\n\n
\u201cThe fund size is the total value of assets and derivatives,\u201d Zinyau explained.<\/p>\n\n\n\n
\u201cAs of December 31, 2023, we had US$7.8 million. By December 2024, it grew to US$15.2 million, and further to US$16.7 million by March 31, 2025.\u201d<\/p>\n\n\n\n
Currently, the DPC covers up to US$1,000 per depositor in commercial banks and US$500 for microfinance institutions. However, due to exchange rate volatility, the corporation is considering raising these limits.<\/p>\n\n\n\n
High Coverage for Depositors<\/p>\n\n\n\n
DPC Chairperson Canan Dube emphasized that the current protection levels cover the majority of depositors.<\/p>\n\n\n\n
\u201cWe are able to cover up to 96% of individual accounts up to US$1,000,\u201d Dube said.<\/p>\n\n\n\n
\u201cFor microfinance institutions, coverage stands at US$500. From that perspective, we are doing quite well.\u201d<\/p>\n\n\n\n
Pensioners Still Await Compensation<\/p>\n\n\n\n
While progress has been made in bank depositor compensation, thousands of pensioners who lost savings during Zimbabwe\u2019s hyperinflation crisis in 2008 remain in limbo. Grace Muradzikwa, Commissioner of the Insurance and Pensions Commission (Ipec), acknowledged efforts to address the issue but admitted delays.<\/p>\n\n\n\n
\u201cWe have made headway in dealing with compensation,\u201d Muradzikwa told reporters.<\/p>\n\n\n\n
However, critics argue that the process has been too slow, leaving elderly pensioners struggling amid economic hardships.<\/p>\n\n\n\n
Restoring Financial Confidence<\/p>\n\n\n\n
The DPC\u2019s efforts aim to rebuild trust in Zimbabwe\u2019s banking sector, which saw multiple collapses during the economic turmoil of the 2000s. With the fund\u2019s growth and expanded coverage, authorities hope to prevent a repeat of past crises.<\/p>\n\n\n\n
\u201cThe idea of a compensation scheme was the right step toward addressing challenges from bank closures,\u201d Zinyau said.<\/p>\n\n\n\n
\u201cWe remain committed to protecting depositors and maintaining stability in the financial sector.\u201d<\/p>\n\n\n\n
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