HARARE – A motion that was tabled in Parliament which seeks to amend the Deposit Protection Act (DPA) in order to strengthen protections for ordinary savers in the event of bank closures or liquidations has received tremendous support from legislators.
Legislators in Zimbabwe are proposing new measures to protect bank depositors and punish banks after a period of financial trouble that saw several banks fail. This comes after many people, including pensioners, lost their savings due to poor management by the banks.
The current laws are seen as inadequate, and legislators are calling for changes to the Deposit Protection Corporation Act to better protect consumers.
They also want the government to compensate people for their losses in the same currency they deposited their money.
The motion was raised by Murehwa West Member of Parliament Farai Jere.
Zaka South MP Clemence Chiduwa on Tuesday supported the motion highlighting the importance of the DPA as a government-backed scheme, managed by the Reserve Bank of Zimbabwe (RBZ), to instill public trust in the banking system.
The Act guarantees compensation to depositors if their bank folds. Chiduwa, however, pointed out shortcomings in the current legislation, arguing that it prioritises “statutory depositors” over ordinary citizens.
The MP cited past instances where depositors shouldered the burden of bank liquidations. Chiduwa emphasised the crucial role a well-functioning financial system plays in Zimbabwe’s economic health. When depositors lose faith, the ease of doing business, national saving habits, and overall bank usage suffer.
Referencing a specific regulation, S.I. 133 of 2019, Chiduwa criticised the lengthy compensation process overseen by the Depositors Protection Corporation and the RBZ.
This delay, according to the MP, allows banks with initially negative asset-liability ratios to reach a point where their assets exceed liabilities. This situation enables such banks to use minimal resources to compensate depositors while retaining significant residual assets.
Chiduwa urged Parliament to ensure the amended DPA aligns with the Consumer Protection Act and the National Policy of Financial Inclusion (2022-2026). Noting the new Insolvency Act’s exclusion of banks from its liquidation purview, the MP stressed the need to address this gap.
Chiduwa further proposed holding directors and shareholders of failed banks accountable. The current practice, according to the MP, allows those responsible for bank failures to benefit from minimal payouts to depositors while keeping the remaining assets.
Chiduwa called for a new law that prevents such individuals from profiting from their actions, including barring them from holding public office or reopening financial institutions.
“So I am saying we need to close that gap. I am also proposing that going forward, the new law should bar directors, shareholders of failed banks from benefitting from their wrongdoing,” Chiduwa said.
Expressing his support for Jere’s motion, Chiduwa emphasised the importance of amending the DPA to protect all depositors. He argued that such changes would strengthen consumer rights, rebuild trust in the banking sector, and promote financial inclusion.
Chiduwa also highlighted the current lack of confidence in the banking system and the need to revive a national saving culture to foster investment and economic growth.
Dzivarasekwa MP, Edwin Mushoriwa, argued that the Act, in its current form, did not adequately protect depositors who lost money when several banks were closed by the Central Bank.
Desire Moyo, MP for Nkulumane constituency, also supported the motion, highlighting the need to protect depositors and ensure the stability of the banking sector. He argued that a strong monetary policy statement was necessary to achieve this.
Most legislators emphasised the importance of amending the Deposit Protection Act to better protect depositors.