Nostro FCA Holders Won’t Be Compensated When A Bank Shuts Down

Deposit Protection Corporation (DPC) was established to protect depositors by paying them back a certain amount of money when their bank goes bankrupt. In other words, DPC insures your deposits so that you get something if your bank becomes insolvent or bankrupt.

Insuring deposits gives depositors confidence in the banking system because they know that when a bank goes bankrupt they will have something to fall back on.

Now, it turns out that Nostro Foreign Account (FCA) account holders are not insured by the Deposit Protection Corporation in the event of a bank failure. DPC’s chairman, Agmos Moyo said:

We are aware that there are still accounts called nostro accounts which are denominated in USD. We did approach the RBZ (Reserve Bank of Zimbabwe) and shareholder as to whether we should have a separate cover to cater for those (nostro) accounts in the event of bank failure.

The current policy directive is that they be quarantined and therefore not covered, as per the directives from the Ministry of Finance. So it follows that we are not levying any contribution in respect of for the accounts, which are denominated in USD.

So it follows therefore that if there is (bank) failure, we will not pay for the USD accounts or any other currency. That is the current position

So when the bank that you opened your Nostro account with is bankrupt, you won’t get any foreign currency back. Currently, the DPC only compensate Zimbabwe Dollar account holders when a bank goes under.

Also read: Deposit Protection Corporation Stuck With $3.2 Million Unclaimed Money By Customers Of Failed Banks