HomeNewsDPB repays Genesis depositors

DPB repays Genesis depositors


Genesis Merchant Bank depositors are this week expected to access their funds locked up in the defunct institution through the Deposit Protection Board (DPB) after the bank successfully applied for liquidation.

Genesis last month failed to raise $10 million capital prescribed by the Reserve Bank of Zimbabwe resulting in the bank surrendering its operating licence.
At the time of its closure, the bank had 136 depositors and a negative capital of $3, 2 million.
DPB acting chief executive officer Vusi Vuma last week said depositors would receive $150 each.
“We have just obtained a court order for the liquidation of Genesis Bank.
“We are analysing the financial position of the institution and by this week we will be giving depositors their money,” Vuma said.
He said the board was funded by banks through premiums, but due to the liquidity crisist the DPB had failed to provide 90% cover to depositors.
He said the board was capitalised to cover depositors for small institutions warning that, if a big bank was to go under, the failure would result “in a systemic crisis and that will require the government intervention”.
Genesis is the second bank after NDH Merchant Bank to surrender its licence after the adoption of multi-currencies three years ago.
Last week, Finance minister Tendai Biti said the central bank would tighten banking sector monitoring and supervision to address anomalies in the sector.
Biti said the sector was characterised by uncertainties and high interest charges on loans.
“There is a lot of arbitrage, a lot of uncertainties in our banking systems, especially on issues around liquidity, regulations and the banking sector is not playing a greater role in financial intermediation,” he said.
He said the financial sector was now characterised by what he termed “voodoo banking practices” where interest rates on loans were above 10%, but no interest on deposits.
“We now have a feature we never thought would happen that your money will disappear in a bank and you are told by the bank manager to come and top up yet you put your money in the bank,” he said. The Bankers’ Association of Zimbabwe has repeatedly called for adequate capitalisation of the DPB.

Recent Posts

Stories you will enjoy

Recommended reading