Online Reporter
Business Reporter
THE Deposit Protection Corporation (DPC) 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.
