HomeBusinessDPC to meet over Royal Bank assets auctioning

DPC to meet over Royal Bank assets auctioning

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THE Deposit Protection Corporation (DPC) will tomorrow hold its first meeting of creditors and members at the Master of High Court to get proof of claims ahead of the auctioning of the defunct Royal Bank’s assets.

VICTORIA MTOMBA
BUSINESS REPORTER

Royal Bank’s 34 fixed properties dotted around the country will go under the hammer on Friday.

The DPC said the first meeting will be held in Harare and creditors are supposed to submit claims and the liquidator’s interim report will be presented by the liquidator John Chikura.

The properties are located all over the country and the auctioning of the properties will necessitate the DPC to pay creditors who have balances that are above $500.

Royal Bank surrendered its operating licence in July 2012 as it was facing capital constraints.

The bank had a cumulative loss of $5,98 million as at June 30 2012 which was due to high operating costs and had been using depositor’s funds to cover operating expenses.

The central bank said Royal had outstanding debts of $2,27 million and some creditors and depositors had instituted legal proceedings against the bank for failing to meet payment obligations. Royal Bank at some point gave depositors $50 as withdrawal.

It is estimated that the bank owns land and buildings valued at $4,8 million.

Royal Bank had plans to convert into a microfinance institution. According to the central bank, Royal Bank was undercapitalised with a core capital of only $1,85 million as at June 30 2012 which was below the regulatory capital requirements of $12,5 million then for commercial banks.

A Kenyan investor, Commercial Bank of Africa, had shown interest in Royal and wanted to acquire 62% shareholding. The deal did not come to fruition amid claims by Royal founders that the central bank had stymied the deal by closing the bank when an investor was about to pour in money.

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