MORE than half of Genesis Merchant Bank's depositors have received deposit insurance payments, but creditors would be paid after disposal of assets, an official with the Deposit Protection Corporation (DPC) said last week.
Genesis was closed after it surrendered its banking licence in June this year following failure to meet the US$10 million minimum capital requirements set by the central bank.
DPC administers the Deposit Protection Fund, whose objective is to compensate depositors for losses incurred in the event of insolvency of a contributory institution.
Genesis had negative capital of US$3,2 million. Wisdom Mandizvidza, Banks Resolution manager at DPC, told Standardbusiness last week that 46 out of 85 depositors had been paid US$150 each. Mandizvidza said five major creditors of Genesis submitted claims at the first meeting of creditors held early this month, adding that the remainder would make its submissions at the second creditors' meeting on November 7.
Asked why some depositors had not collected the US$150, Mandizvidza said they were part of the creditors. At the October 3 creditors' meeting, claims were of over US$600 000 made by five creditors. Mandizvidza said they expected at least 10 creditors at next month's second meeting. Some of the big creditors include the National Social Security Authority (NSSA). NSSA had US$800 000 in Genesis Bank.
Asked why the deposit insurance payment was paltry at US$150, Mandizvidza said DPC had submitted proposals to Treasury for the payment to be reviewed so that the cover would be 90% of each depositor's funds.
"We are lagging behind. We are pushing the Ministry [of Finance] to review the cover. If it is reviewed, the premium paid by banks will also be reviewed upwards," Mandizvidza said.
Banks pay a maximum of US$30 000 each per quarter meant for deposit insurance.
Since its inception in 2003, the DPC [formerly Deposit Protection Board] has compensated depositors of three collapsed institutions, Sagit Finance House, Century and Rapid Discount House.