RBZ picks Allied Bank provisional liquidator

25 Jan, 2015 - 00:01 0 Views

The Sunday Mail

THE Reserve Bank of Zimbabwe has applied to the High Court to have the Deposit Protection Corporation (DPC) appointed as the provisional liquidator of Allied Bank.

This follows the cancellation of Allied Bank’s operating licence by the RBZ on January 8 after it became clear the institution was grossly undercapitalised and faced chronic liquidity challenges.

Before its closure, Allied had widened its losses to US$4,2 million in the six months to June 2014 from US$2,4 million recorded in the same period in 2013 due to a decline in operating income and a spike in interest expenses.

DPC public relations manager Mr Allen Musadziruma told The Sunday Mail Business last week that the “appointment has not yet been confirmed by the courts”.

Mr Musadziruma said if appointed the provisional liquidator, the DPC would advise insured depositors through the media to apply for compensation.

“Once a duly completed and certified claim form has been submitted together with supporting documents (copy of national ID, valid passport or valid driver’s licence), the corporation will verify the balances in the depositors’ accounts.

“Currently, a depositor is reimbursed within five working days from date of submission of the completed claim form. Payments to Allied Bank clients will commence soon and public notices will be issued in due course,” said Mr Musadziruma.

The DPC has the capacity to pay off Allied Bank’s depositors up to the maximum insured limit of US$500 per depositor per account, and any balances above US$500 will be recompensed through the liquidation process upon realisation of assets.

Disposal of the bank’s assets will only take place after granting of a final liquidation order by the High Court.

The DPC is already undertaking the same process for Royal Bank creditors, with whom it is meeting before the Master of the High Court on Wednesday so that they submit claims and get the liquidator’s report.

About US$1,3 million will be paid to Allied Bank’s depositors as deposit insurance payments. Payments to depositors will be done through mobile phone transfers, cash and bank transfers.

Allied Bank was a member of the Deposit Protection Scheme as membership is mandatory for any banking institution registered in terms of the Banking Act (Chapter 24:20) and the Building Societies Act (Chapter 24:02).

Allied Bank is the sixth bank to have its licence cancelled by monetary authorities since adoption of the multi-currency regime in 2009. The others are Royal, Genesis Investment, Trust, Interfin and Capital banks.

Two other banks, AfrAsia Zimbabwe and Metbank Limited, are exploring recapitalisation plans and scouting for investors to rescue their operations.

Market watchers believe local financial institutions are failing because of lax corporate governance which has led to increased and unsustainable insider loans.

Non-performing loans now stand at 20 percent, up from 18 percent in June 2014, making it difficult for the weak institutions to attract fresh capital to shore up their coffers to sustainable levels.

The DPC administers the Deposit Protection Fund established under Section 13 of the Deposit Protection Corporation Act (Chapter 24:29).

DPF’s main mandate is to compensate depositors in full or in part for losses incurred in the event of insolvency of a contributory institution.

Home-seekers’ US$1,8m trapped in bank

AN estimated US$1,8 million belonging to low-income earners who had invested in a housing scheme at the behest of Zimbabwe Amalgamated Housing Association (Zaha) is trapped in Allied Bank following the closure of the lender on January 8 this year.

Zaha had entered into an alliance with Allied Bank through which home-seekers opened savings accounts with the lender.

Individuals only became eligible for housing schemes in Budiriro, Harare and Norton once their deposits reached either US$1 500 or US$3 000 depending on the offer they had taken up.

The scheme attracted scores of low-income earners, including vendors.

But chances that they will be able to recover their money from the bank are slim.

The Deposit Protection Corporation (DPC), which is mandated to compensate them, might not be able to pay the full amounts owed.

Zaha director-general Mr Killer Zivhu said they had expected Allied Bank to close and this did not mean the end of the association.

“Our future as Zaha did not depend on Allied Bank. Zaha is not worth US$1,5 million and we cannot close because of that.

“We told our clients to move banks because we had expected that Allied Bank would close as early as last year. It is not a secret that the guys were struggling and many people thought they would get an investor, but that failed.

“However, those that had opened personal accounts and had not qualified for any of our schemes, their money is still in their accounts and we are not answerable.

“They were not yet our members; all our members were told to move accounts and to stop depositing any more money into Allied Bank.”

Mr Zivhu, who had earlier promised to give details about the number of prospective members not yet eligible for their schemes but had opened accounts with the bank, was no longer answering his mobile phone by the time of writing.

Government has allocated co-operatives vast tracts of land to develop and ease accommodation problems but prospective home-seekers continue to be duped.

Over 2 600 housing co-operatives are registered with 1 200 being allocated housing stands.

Harare alone has more than 500 000 people on its housing waiting list, while the national housing backlog stands at 1,25 million.

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