HARARE - The Depositor’s Protection Corporation (DPC) says it will disburse close to $1 million towards depositors whose money was wiped out when the country adopted the multi-currency system.
John Chikura, the corporation’s chief executive said the money was set to cover depositors of now defunct banks such as AfrAsia Bank Zimbabwe Limited (AfrAsia), Allied Bank Limited (Allied) and Interfin Bank (Interfin).
“About $929 061 is expected to cover the three closed banks under the demonetisation scheme, which are Allied Bank, AfrAsia and Interfin Bank,” he said.
The DPC chief said his organisation was going to pay the equivalent United Stated dollars amount for each account balance as at December 31, 2008 converted by the UN exchange rate of $1 to Z$35 quadrillion towards demonetisation.
Demonetisation is the act or process of removing the legal status of a currency unit.
Accordingly, the DPC shall pay any person who was a holder of a Zimbabwe dollar denominated bank account for AfrAsia and Allied as at December 31, 2008.
“For these banks, cash shall be disbursed in the following manner: $5 for every account that was held with a balance of zero up to one hundred and seventy five quadrillion Zimbabwe dollars; and
“For any Zimbabwe dollar balances above one hundred and seventy five quadrillion Zimbabwe dollars at the rate of one United States dollar to thirty five quadrillion Zimbabwe dollars,” Chikura said.
Chikura further noted that all Zimbabwe dollar account holders for AfrAsia and Allied Banks had to approach the DPC offices for payment.
“Take note that in terms of the demonetisation guidelines, only holders of active deposit/savings accounts as at December 31, 2008 are eligible for payment whilst holders of investment accounts are not eligible for payment,” he said.
This comes as the central bank last year disbursed about $4 million towards paying depositors’ money which was wiped out in the transition to a multi-currency regime.
Demonetisation of the Z$, which started in June 2015 following the promulgation of Statutory Instrument 70 of 2015 — was running smoothly despite initial resistance from the public.
“Of the $20 million that had been initially put aside for the exercise, $4 million has been paid out so far,” central bank governor John Mangudya said last year.
In 2009, Zimbabwe ditched its local currency and government adopted the multi-currency system — a basket of currencies dominated by the United States dollar and South African rand.
According to Mangudya, the demonetisation process is necessary in order to buttress government’s commitment to the multiple currency system and restore confidence in the economy.