THE Deposit Protection Corporation (DPC) chief executive officer Hopewell Zinyau says the corporation is pushing for amendments to its governing legislation to promote financial stability.
The Deposit Protection Corporation Act established the corporation and a Deposit Protection Fund in Zimbabwe to compensate depositors if a financial institution becomes insolvent.
Plans to amend the legislation comes at a time when the financial sector is facing its worst liquidity crisis in years because of hawkish Treasury and central bank policies meant to support the local currency, the Zimbabwe Gold (ZiG).
“To enhance the protection of depositors and promote financial stability, the corporation is pushing for the implementation of the amendments to the DPC Act,” Zinyau told NewsDay Business.
“We are hopeful this exercise will be concluded this year.”
DPC provides a maximum cover of up to US$1 000 per deposit class per banking institution and US$500 per deposit class per deposit-taking microfinance institution.
In ZiG, the cover is the official exchange rate equivalent of those foreign currency amounts.
Zinyau said the corporation continued to strengthen its ICT systems, environmental, social and governance framework, enterprise risk management and corporate governance frameworks to enhance depositor protection and promote financial stability.
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“The corporation is a member of the National Financial Inclusion Forum which is spearheaded by the Reserve Bank of Zimbabwe and consists of other regulators in the financial sector,” Zinyau said.
“The objective of the forum is to collaborate and help drive financial inclusion and financial literacy of the unbanked. Tracking of such financial data is done through the Reserve Bank of Zimbabwe.”
DPC is an active member of the Multi-Disciplinary Financial Stability Committee, which comprises the central bank, the Insurance and Pensions Commission, and the Securities and Exchange Commission of Zimbabwe.
“The main mandate of the Multi-Disciplinary Financial Stability Committee is to promote financial system stability by identifying potential risks and recommending appropriate policy responses,” Zinyau said.
DPC is an active member of the International Association of Deposit Insurers, an international standard-setting body for deposit insurers across the world.
It participates in workshops, seminars and study tours as part of information exchange and collaboration with other deposit insurers.”
To date, DPC has hosted countries such as Malawi, Ghana and Swaziland for such collaborative exchanges, Zinyau said.
