Benefits of Deposit Protection

Benefits to Depositors:

  • Deposit protection ensures that depositors do not lose all of their hard earned savings in the event of failure of a member institution.
  • Depositors will know how and when reimbursement of their deposits will be made in the event of failure of a member institution.
  • Deposit protection is automatic once a depositor opens an account with an insured institution. No application is required.
  • There is no charge to depositors for deposit protection, member institutions bear the cost of deposit protection.

    Benefits to the Financial System

     

    • DPC promotes public confidence in the Zimbabwean  financial system by protecting depositors against the loss of their deposits.
    • Deposit insurance complements the  supervisory and regulatory framework by providing incentives for sound risk management in the financial system.
    • Deposit protection reduces the likelihood of panic withdrawals and bank runs thereby enhancing stability and confidence in the financial sector.
    • Deposit protection contributes to the  the stability of the financial system by dealing with bank failures expeditiously and reimbursing depositors promptly