Business Reporter
THE Deposit Protection Corporation has invited members of the public and corporate institutions to collect original legal security documents previously lodged with five closed banking institutions.
The notice applies to individuals, companies, executors of deceased estates and liquidators who deposited collateral instruments with AfrAsia Bank Limited, Royal Bank Zimbabwe Limited, Trust Banking Corporation, Interfin Bank Limited and Allied Bank Limited.
The retrievable instruments include title deeds, mortgage bonds, notarial bonds and notarial general covering bonds, DPC said in a statement.
Individual claimants must present a valid national Identity Document (ID) or passport to claim their security documents. Corporate applicants must submit an official board resolution authorising their designated representative to receive the securities.
Executors of deceased estates are required to provide a letter of administration.
Between 2012 and 2015, Zimbabwe experienced a wave of financial sector challenges that resulted in the Reserve Bank of Zimbabwe (RBZ) cancelling the operating licenses of troubled banks and placing several indigenous banking institutions under liquidation.
Acute liquidity constraints, gross undercapitalisation, severe non-performing insider loans and pervasive corporate governance failures caused the financial challenges.
During that period, several institutions extended significant, uncollateralised loans to bank directors, shareholders and related entities.
High default rates on the insider loans severely eroded asset quality and drained capital reserves.
Following the dollarisation of Zimbabwe’s economy in 2009, banks struggled to raise core capital to meet the RBZ’s escalating statutory capital thresholds.
A wider liquidity crunch across the domestic economy hindered daily interbank obligations and depositor withdrawals.
Interfin Bank Limited was placed under curatorship in June 2012 before going into liquidation in January 2015 after efforts to recapitalise or secure a strategic investor failed.
The collapse of Interfin Bank was primarily driven by non-performing insider loans exceeding US$130 million, persistent liquidity deficits and severe financial misstatements.
Royal Bank Zimbabwe voluntarily surrendered its banking license in July 2012 due to a severe liquidity crisis, operational losses and inability to meet statutory capital thresholds and a lack of core banking software systems.
The Reserve Bank cancelled Trust Banking Corporation’s license in December 2013 and placed the institution under liquidation in October 2014 following rapid capital depletion, misuse of depositor funds, and insolvency.
Allied Bank surrendered its license in January 2015 after remaining severely undercapitalised and failing to meet daily depositor withdrawal demands and operational funding requirements.
AfrAsia Bank Zimbabwe Limited surrendered its license in February 2015 after non-performing loans and liabilities surged, leaving its core capital at US$6 million against regulatory requirements.
Following the cancellation of the banks’ operating licenses, the High Court appointed the Deposit Protection Corporation (DPC) as the official liquidator for the five financial institutions.
As part of its statutory liquidation mandate, the DPC is responsible for compensating eligible depositors through insurance coverage payouts.
The DPC oversees asset realisation, which involves liquidating physical bank assets, recovering outstanding loan portfolios, and taking custody of pledged collateral.
Under its mandate, the DPC is also responsible for returning legal title instruments, such as title deeds and mortgage bonds, to borrowers who have cleared their debt obligations or whose facilities are being wound up.
