Depositors start receiving compensation for currency shocks

Depositors start receiving compensation for currency shocks

Pretty Manyewe

Government has availed funds to compensate depositors whose money lost its value when the exchange rate was floated in February 2019.

The 2021 National Budget Statement, which was presented in November 2020, stated that the Government through the Deposit Protection Corporation would compensate small and vulnerable depositors who had balances of USD$1000 and below for the loss of value incurred due to the exchange rate movement from USD1 : RTGS$1 to USD$1 : RTGS$2.5 as of February 2019.

In a statement, Deposit Protection Corporation Chief Executive Officer Mr Vusi Vuma said Government has availed the first US$400 tranche of the expected US$75 million.

“Government has now availed through the Kuvimba Mining Housethe sum of USD$400000 to the Deposit Protection Corporation as agent for distribution to vulnerable depositors. Given the available resources, several scenarios were iteratively evaluated to identify a method that offers the best compensation to depositors,” said Mr Vuma.

The US$400 000 will be first disbursed to eligible depositors who had balances of USD$1000 and below Deposit-Taking Microfinance Institutions.

“In other words a depositor who had USD$1000 in his or her account would get USD$600 being the total lost value. Same as those who had USD$500, they should get USD$300 as their total lost value and so forth,” wrote Mr Vuma.

Qualifying depositors were advised to submit their claims (as at 20 February 2019) within a period of 12 months running from November 8, 2021 to November 7, 2022 to their respective registered Deposit-taking Microfinance Institutions.

“The Deposit-Taking Microfinance Institutions will periodically submit the schedule of claims to the DPC for verification, validation and subsequent remittance of the requisite payment to the Deposit-Taking Microfinance Institutions for onward settlement to eligible depositors in USD with incurring transaction costs,” said Mr Vuma.

Subsequent tranches for disbursement will only be allocated to remaining deposit-taking institutions namely commercial banks, building societies, savings bank as well as and when additional funds are availed.