Trust Bank depositors to get $500

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TRUST Bank Corporation Limited depositors are this week expected to access part of their funds locked up in the bank through the Deposit Protection Corporation (DPC) after the Reserve Bank of Zimbabwe (RBZ) successfully applied for liquidation of the bank.

Tarisai Mandizha,Business Reporter

Trust Bank Corporation is facing liquidation after the RBZ cancelled its banking licence over allegations of abuse of depositors’ funds and violation of the provisions of the Banking Act.

Trust Bank was previously closed in 2005 for imprudent banking practices.

DPC chief executive officer John Chikura was appointed the provisional liquidator.

In a statement last week, Chikura said: “Under its current mandate, DPC will immediately upon verification, pay all depositors up to the maximum insurable limit of $500 per depositor. Notice is hereby given that the above-mentioned banking institution was placed under provisional liquidation in terms of the High Court order HC10703/13 granted in Harare on December 18, 2013, before honourable Justice Matanda,” reads part of the statement.

Under the Deposit Protection Corporation Act Chapter 24:29, the DPC’s mandate has been expanded to involve the liquidation and curatorship of banks. The act enables them to look after the interests of the depositors under the Banking Act.

RBZ accused Trust Bank management of abusing depositors’ funds and all efforts to rectify the problem had failed.

The central bank said the bank was financially unsound and was not operating in line with sound administrative and accounting practices and procedures in violation of the Banking Act.

“In particular, the bank is critically undercapitalised with a core capital of $1,90 million and has been posting persistent losses,” RBZ said.

RBZ added that the institution has been facing critical liquidity challenges emanating from the poor loan-book and the inadequate working capital and gross abuse of depositors’ funds, accounting practices and procedures.

In terms of RBZ’s phased regulatory capital thresholds, commercial banks are required to have $75 million at hand by end of this month and $100 million by June.

9 COMMENTS

  1. Other copying and pasting Mr Editor you cant even go a letter further to critic the allegations, what really are they? Or to critic the value of 500.00 for a depositor with 1000s or just to interogate why the RBZ would be the one to apply for the liquidation yet the Act you reference gives the DPC that mandate? When would DPC consider curatorship then and was that due process weighed? What does ‘under it current mandate’ imply, that it can change adhocly? You dont even compare with other banks that went through the same process to give readers an insight, like Royal? Or touch on other banks with direr situation and seem untouchable? Whats the core capital of Interfin? Or to talk of those failed attempts to redress the situation and what befell them? Looks like the article was published in a DPC newsletter. As readers we rely on you.

  2. DPC bhora pasi please. Ko how can announcements be done when the final order by the high court to liquidate the bank is not yet given? Let’s follow procedures please. ..

  3. Banks should not be rescued. They should fail if they have no customers who trust them. We only need 5 Banks in Zimbabwe – Maximum. Allow the rest to fold.

  4. We are getting these articles almost weekly and with no relevant information to the reader and the affected client.It was not my bank but it seems so much is amiss here. Just for interest sake how do you protect clients money by liquidating rather than getting an investor to prop up the bank. What about employees affected. It seems we are shooting ourselves in the foot. Whatever it is i smell a rate.

  5. I also smell a rat, a very big one too.

    If I was a depositor, I will not support such rubbish.

    I heard KPMG has deployed half their workforce there. I wonder if they no longer have clients to audit especially this time of the year. I think this is the only lucrative business, liquidation.

    I hope depositors will oppose this, or else KPMG and DPC will take the cream and deprive the very depositors whom they claim to want to protect.

  6. think like a man not an animal.imagine if it was your three months salary wen yu want to pay rent,fees,transport to wrk and food as well.wat will yu do?please dont just coment unnecessary coments hey.mira tipihwe mari dzedu mhani after all yu dont follw e whole story kuti irikubva kupi ichiendepi

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