Govt moves to compensate depositors

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George Guvamatanga

BY TAURAI MANGUDHLA
MILLIONS of taxpayers’ money will be channelled into reimbursing depositors whose United States dollar bank balances were wiped out in 2019 when the Zimbabwe dollar was reintroduced.

Finance ministry secretary George Guvamatanga yesterday told NewsDay that although computations to come up with a global figure were still ongoing, depositors with values of less than US$1 000 were already being compensated.

Guvamatanga said the idea was to boost public confidence in the country’s banking system.

“We have done a research and people generally don’t have confidence in our banking system because of such issues and you will find that no one will come and say let me compensate my depositors somehow. That’s why the government is stepping in,” he said.

“Depositors, whose balances were US$1 000 and below constitute the bulk of the beneficiaries. The main thing is to try and have market discipline again and the President has realised that the market has actually gone rogue again,” he added.

According to the Reserve Bank of Zimbabwe, total banking sector deposits amounted to $10,32 billion as at December 31, 2018, up from $8,48 billion as at December 31, 2017.

At the time, the banking sector was predominantly funded by demand deposits which accounted for 64,94% of total deposits as at 31 December 2018.

As at December 31, 2018, total Nostro FCA deposits amounted to $673,81 million, representing 6,53% of total deposits. The Nostro FCA depositors are predominantly constituted by corporate deposits amounting to $654,77 million, representing 97,17% of total Nostro FCA deposits, as at December 31, 2018.

As at December 31, 2018, the number of corporate RTGS FCA depositors was 214 094 valued at $8,67 billion, while the number of individual RTGS FCA depositors, amounted to 3,24 million valued at $894,54 million.

Of the 3,24 million individual depositors, 95,98% held deposit balances of less than $1 000 each, with an average balance of $80, accounting for a total $213,42 million. On the other hand, corporate RTGS FCA depositors (1 884) holding balances in excess of $500 000 constituted 83,64% ($7,25 billion) of total corporate RTGS deposit of $8,67 billion as at December 31, 2018.

By June 2019, the RBZ said, total banking sector deposits amounted to $16,92 billion, an increase of 63,95% from $10,32 billion as at December 31, 2018. FCAs accounted for 12,4% of deposits at the time.

The RBZ January 2019 monthly update stated that broad money supply declined by 1,53%, from $10 billion in December 2018 to $9,9 bilion in January 2019.

Last week, President Emerson Mnangagwa announced various measures to restore confidence, preserve value and restore macroeconomic stability, which included restoration of lost value on bank deposits with a US$1 000 balance and below as of end of January 2019.

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