FAQ

1. Which bank customers are protected by the Fund?
Depositors in all registered deposit-taking institutions including commercial banks, merchant banks,finance houses, discount houses, and building societies, are protected by the Fund. Depositors in branches of foreign banks operating in Zimbabwe are also protected.

2. What types of deposits are protected?
All types of deposits received by a bank, including savings deposits, current accounts, and time deposits, are protected. Also protected are un-invested bankers cheques, money orders, drafts, and traveller's cheques, for which a protected bank is primarily liable. However, Negotiable Certificate of Deposits and Banker's Acceptance certificates are not covered.

3. What is the maximum deposit coverage per depositor?
The maximum deposit coverage per depositor per institution under the Board's current mandate is US$150.00.

4. How does the Fund protect bank depositors against loss?
Each bank insured by the Fund must meet high standards of safety and soundness in its banking practices. Adherence to this requirement is determined through regular supervision and investigation by the Reserve Bank of Zimbabwe. If, despite these surveillance efforts, a protected bank gets into financial difficulties and must be closed, the Fund acts as quickly as possible to pay off depositors up to the protected amount.

5. Does the Fund protect the interests of creditors and shareholders of a failed bank?
No. The Fund protects only depositors.

6. How does the Fund meet its obligations to depositors of a failed bank?
The Fund meets its obligations through deposit pay-offs and/or deposit transfers . A deposit pay-off is a procedure under which the Fund directly pays depositors by cheques up to the protected amount, while a deposit transfer is a form of pay off whereby depositors are paid by transferring their protected deposits to the depositor's account in another bank. Instructions as to the mode of payment are provided by the depositor on the claim form.

7. When can a depositor expect to receive his or her money?
The Fund will begin paying depositors within a few weeks of the bank's closure. Speed and efficiency is what the Board seeks to provide to all depositors.

8. Where does the depositor obtain his or her money after receiving notice of a bank's closing?
The information on where and when depositors will be paid is posted on the doors of the closed bank. It is also published in the press and indicated in the notices sent to the depositors.

9. Must a claim be filed in person?
Yes. However, those who are unable to appear in person may file claims by mail. These forms should be returned to the institution from where the claimant picked the form. All forms must be signed in the presence of and witnessed by a Commissioner of Oaths, a Magistrate, Notary public or persons authorised to authenticate public documents.

10. Who should file a claim if more than one person is authorised to draw on an account?
Payment by the Fund is made to those people authorised to make withdrawals from their account. For example, either party could claim compensation on an account if either of the two parties was authorised to sign for withdrawals. If two signatures were required to make withdrawals, both signatures would be necessary to claim deposit protection. If there is difficulty in obtaining a second signatory the only signatory available will be required to give an indemnity to the Fund.

11. What happens in situations where depositors are not in a position to personally execute claims?
In situations where a depositor may be out of the country, a duly authorised attorney may complete and sign the necessary documents. The degree of authority bestowed on the agent shall be in accordance with the tex t of the power of attorney, and a great deal of care should be observed when paying the attorney. There may also be a situation where a depositor is incapacitated by illness or infirmity but in full control of his or her mental faculties. In such situations, a written authority for payment to be received by a named third party on his/her behalf would be necessary. In case of mental infirmity, a guardian appointed by a court of law may execute all the necessary documents on behalf of the depositor. Where a depositor has died, the administrator of the estate or executor/executrix of the deceased may complete all the necessary documents and receive the payment due. An administrator of an estate is expected to operate an account for the estate in respect of which a full account is rendered before confirmation by the court of the grant. Consequently the administration receives funds in trust for heirs and creditors. Payments to the administrator should be by cheque, preferably endorsed "A/C PAYEE ONLY".

12. What happens to cheques that do not clear in an account before the bank is closed?
In a pay-off, these cheques are not paid or charged against the accounts because the Fund closes all the accounts at the time the bank is closed. Such cheques are returned and will be marked 'DRAWEE'S BANK CLOSED' . This does not reflect on the credit standing on any bank depositor. However, it is the depositor's responsibility to make funds available to their creditors through other forms of payment.

13. How quickly will the Liquidator make payments of the unprotected portion of deposits?
Payments will depend on the rate of recovery from the liquidation of the bank's assets, and the extent and priority of claims from other creditors of the bank as determined by the Liquidator. Final disbursements may take several months or even years.

14. What happens to a borrower who owes money to a closed bank after the pay-off?
Borrowers who owe money to a closed bank will be allowed by the Liquidator to continue servicing their loans in accordance with the terms of the loan agreement. However, if the borrowers fail to meet the agreed repayment schedule, they will be served with demand letters recalling the entire outstanding debt. In case of default, any securities held by the bank shall be realized upon expiry of a valid statutory notice. Where no securities are held a civil suit shall be filed for recovery of the entire debt.

15. What happens if the borrower is delinquent at the time of the bank's closure?
If a borrower is delinquent at the time of bank's closure he will be served with a demand notice recalling the entire outstanding debt. In case of default, any securities held by the bank shall be sold upon expiry of a valid statutory notice. Where no securities are held a civil suit shall be filed for recovery of the entire debt.

16. If a depositor has accounts in several different protected banks, will the deposits be added together in determining protected coverage?
No. The maximum protection coverage is applicable to each protected depositor in a protected bank without regard to deposits held in any other protected banks.

17. How is the DPB funded?
The DPB is funded through premiums paid by member institutions. When necessary, the DPB is also authorised to borrow additional funds. Further additional funding is derived from the Board's own investments.