banksss.jpgThe Depositors’ Protection Board is set to introduce a differential premium system, whereby banks are charged according to the risk they pose to depositors so as to minimize risks to depositors.

The move is a host of measures by the Depositors Protection Board to mitigate risks facing depositors in the banking sector.

 

In an interview with ZBC News, Depositors Protection Board Corporate Legal Secretary, Mr. Vusi Vuma said the board is also collaborating with the RBZ on alternative resolution mechanisms to end reliance on the payout system in resolving bank failures.

 

“Firstly, we have come up with a cover limit which we pay out in the event any bank collapses….even at that US$150 we cover at least 78% of depositors which is the majority of banking people……The other measure is to come up with a differential premium system. At the present moment we have what we call a flat premium rate and this rate does not induce discipline among the banks,” said Mr Vuma.

 

The board currently has a premium payout of US$150 per every individual, which will be paid per depositor in the event that a bank collapses.

 

The Deposit Protection Board is currently under the ambit of the Reserve Bank of Zimbabwe but the Ministry of Finance has crafted the Depositors Protection Corporation Bill which is under debate in parliament to expand the role of the DPB in ensuring a safe banking environment.

 

Premium contributions are currently levied at a flat rate per annum but this is not perceived as deterrent enough to insure discipline among banks.

 

A number of account holders failed to access their money during the hyperinflationary period and others lost money in the changeover to multiple currencies in 2009.