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Court order stalls Interfin depositors’ recovery

By Kudzai Chawafambira

HARARE – Troubled Interfin Bank (Interfin)’s clients will only be paid their deposits after the High Court has granted the Reserve Bank of Zimbabwe (RBZ) an order to liquidate the financial institution, the Deposit Protection Corporation (DPC) said.

Interfin chairman Tim Chiganze
Interfin chairman Tim Chiganze

Last month, the RBZ denied extending Interfin’s curatorship after potential investors failed to inject fresh capital, paving way for its liquidation.

However, the DPC — established by government to protect depositors against the loss of their insured deposits in the event of a bank failure — said it is “waiting for RBZ to give us instructions after they have been granted a High Court order to liquidate the bank”.

“We will be appointed as the provisional liquidator in order to cater for small depositors and our maximum insurable limit is $500,” DPC’s chief executive John Chikura told businessdaily.

He added that the process may take three months in order to ascertain the bank’s assets for final liquidation.

RBZ had given Interfin an eight-day ultimatum to December 24, 2014 to finalise discussions with a potential investor, it hoped would inject $50 million into the bank.

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Interfin collapsed in 2009 upon introduction of the multi-currency system, dominated by the US dollar.

The bank had been under curatorship for the past two-and-half years.

Its chairman, Tim Chiganze, recently told an extraordinary general meeting that in September last year, the central bank had written to curator Peter Bailey recommending that the bank surrender its operating licence after struggling to court new investors.

According to RBZ, despite Interfin management’s claims that they had identified two potential investors, the deals had not yet materialised.

“A total of 12 potential investors were considered.

“However, none of the proposals put forward yielded any positive results and the institution’s condition continued to deteriorate in the absence of concrete recapitalisation plans,” said the central bank in a statement.

RBZ added that any further extension of curatorship would only further prejudice depositors and creditors.

The bank was reported to have collected 1,57 percent of the $107,2 million owed by debtors since it was put under recuperative curatorship

As at November, Interfin had a negative net position of $166 million.

So far Interfin Bank, Trust Bank, Genesis Investment Bank, Royal Bank, Capital Bank and recently Allied Bank — have collapsed since 2009, mainly due to poor corporate governance and risk management systems, and inadequate capitalisation. Daily News