The Zambia Union of Financial Institutions and Allied Workers (ZUFIAW) has appealed to Finance Minister, Felix Mutati to consider reviving the Deposit Protection Bill ( DPB).
ZUFIAW president Ackim Mweemba said this is because commercial banks by their nature are highly leveraged institutions, susceptible to liquidity and solvency challenges.
The DPB is a proposed bill aimed at protecting depositors in the face of unexpected closure of a bank such as what occurred at the Intermarket Discount Bank which left a number of clients in the cold.
ZANIS reports Mr Mweemba said in a statement in Ndola today that financial safety nets such as strong prudential regulation, supervision, and a lender of last resort alone as provided in the Banking and Financial Services Act and the Bank of Zambia Act are unreliable.
This is because of the volatility in the market and that there is need to come up with a Deposit Protection Scheme to ensure that depositors’ monies are reimbursed in the event of a bank failure, he said.
He noted that it is important to actualize the deposit protection bill for it will not only create a safety net for depositors but enhance public confidence in the Banking Sector as a whole.
He also bemoaned the plight of workers whose careers abruptly come to an end creating a psychological shock that none of the statutes can cure.
“It is high time that both, the Ministry of Finance and the Ministry of Labour and Social Security put their acts together and ensure that Workers are equally protected and their benefits are prioritized and guaranteed,” he said.
He further observed that when put in place, the Deposit Protection Scheme ( DPS) will make both depositors and the workers not to overreact to bad news of bank failure as witnessed currently.
He said DPSs are best practices in many countries world over.
This is too late for depositors of Intermarket. PF are good at promising things they never intend to do. Remember the Eurobond Sinking Fund or the comprehensive explanation about fuel prices and removal of duties or the 1m jobs Sata promised to create and 500K jobs Lungu promised? All lies.
All depositors are already taken care of by boz. What mweembwa is talking about is total crap. No one was left in the cold after intermarket bank was closed.
We should be careful when we choose a bank. I learnt a lesson on the Meridian saga.
The Chiluba government floated this bill and a deposit protection fund was set up. As it required counter part funding government led by a Mr Mbewe deposited 500m which grew to 4 plus billion it was held with zanaco. Not to lose out on this initiative citi bank managed the fund for a bit and then this led to the much abused Apex Fund that sat at Boz. Am sure most actors on that money are not dead they can tell the public accounts committee what they did with the money, just as we need to know what happened to the privatization trust funds