Genesis Bank depositors compensated

June after failing to raise US$10 million in fresh capital to meet new regulatory requirements.
In an interview, DPC chief executive officer Mr John Chikura said the bank’s depositors were being compensated on an ongoing basis.
“We have all modalities in place and now we have all the statistics on depositors and how much individuals or companies owed the bank,” he said.
When Genesis closed, it had a negative capital of US$3,2 million. Mr Chikura said the Deposit Insurance Scheme was developed out of the need to protect depositors from losing their money in the event of a bank failure. It was also meant to restore the public’s confidence in the banking sector following bank failures in which depositors lost money.
Initially, the Government was supposed to finance the scheme, but Treasury has failed to meet its obligations.
“We are surviving on monthly premiums from banks,” Mr Chikura said, insisting the Government was still obliged to fund the scheme.
Genesis was the second merchant bank after NDH Merchant Bank to surrender its licence after the adoption of multiple currencies three years ago. The Reserve Bank has again raised the minimum capital thresholds for the banks, a move expected to force mergers and a fresh round of bankruptcy in the sector. — New Ziana.