Published: 11 February 2014

The government has directed the Deposit Protection Corporation (DPC) to implement new regulations aimed at rescuing depositors from losing savings after the closure of a bank.

The new banking regulations which were gazetted by government  in November last year are now a reality with the DPC saying it will ensure that depositors will get their full benefits immediately after a bank is closed or is placed under curatorship.

DPC Chief Executive Officer John Chikura said the regulations will also restore confidence in the banking sector.

"Yes the government has told us to ensure that we monitor the implementation of such an instrument," said Mr Chikura.

The new regulations that have also been crafted in line with proposed amendments to the Banking Act seek to protect the interests of depositors by ensuring that owners or directors of a bank desist from abusing savings by engaging in non-core banking activities.

The local banking sector has been facing confidence crisis with revelations that more than $2 billion is circulating outside the formal channels as depositors fear they might not recover their investments in the event that a financial institution is closed.
- zbc

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