TRUST Bank Corporation Limited depositors are this week expected to access part of their funds locked up in the bank through the Deposit Protection Corporation (DPC) after the Reserve Bank of Zimbabwe (RBZ) successfully applied for liquidation of Trust Bank Corporation.
Trust Bank Corporation is facing liquidation after the RBZ cancelled its banking licence over allegations of abuse of depositor funds and violation of the provisions of the Banking Act.
Trust Bank was previously closed in 2005 for imprudent banking practices.
DPC chief executive officer John Chikura was appointed the provisional liquidator.
In a statement last week Chikura said: “Under its current mandate, DPC will immediately upon verification, pay all depositors up to the maximum insurable limit of $500 per depositor. Notice is hereby given that the above-mentioned banking institution was placed under provisional liquidation in terms of the High Court order HC10703/13 granted in Harare on December 18 2013, before honourable Justice Matanda,” the statement reads in part.
Under the Deposit Protection Corporation Act Chapter 24:29, the DPC’s mandate has been expanded to involve the liquidation and curatorship of banks. The Act enables them to look after the interests of the depositors under the Banking Act.
RBZ accused Trust Bank management of abusing depositor funds and all efforts to rectify the problem had failed.
The central bank said the bank was financially unsound and was not operating in line with sound administrative and accounting practices and procedures in violation of the Banking Act.
“In particular, the bank is critically undercapitalised with a core capital of $1,90 million and has been posting persistent losses,” RBZ said.
RBZ added that the institution has been facing critical liquidity challenges emanating from the poor loan-book and inadequate working capital and gross abuse of depositor funds, accounting practices and procedures.
In terms of RBZ’s phased regulatory capital thresholds, commercial banks are required to have $75 million at hand by end of this month and $100 million by June.