The Deposit Protection Corporation (DPC) on Thursday said it would raise the deposit insurance cover to US$500 from January next year following government's pledge to capitalise the corporation.
Currently, the maximum insurable limit is pegged at US$150 00 per depositor per bank.
In an interview, chief executive Officer Mr John Chikura said the development would boost depositor confidence in the banking sector.
"We hope that will enforce the message to depositors that it is safe to put their money in our banks as all measures are being taken to ensure that no depositor will lose their money when a bank fails," he said.
Mr Chikura said government was committed to protecting depositors in situations were banks suddenly fail.
"We are grateful to government for the measures. That will enable the corporation to effectively carry out its mandate of protecting depositors, ensure stability and building public confidence in the banking system," he said.
Mr Chikura said with adequate funds, the corporation would consider opening more branches countrywide.
DPC recently said it required about US$10 million to fully execute its mandate. On the other hand, Mr Chikura said the corporation had started to liquidate Genesis Bank.
He said a series of meetings had been held with the bank's creditors, and the liquidation would proceed.
The bank voluntarily surrendered its operating license to the Reserve Bank of Zimbabwe in June this year after failing to raise US$10 million in fresh capital to meet new regulatory requirements.
To date, over 50 percent of Genesis Bank depositors, whose money was locked up when the bank closed, have been compensated.