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Government has pledged about K1 billion fiscal support towards Investrust Bank PLC in possession, whose losses currently stood at K11 million.
The estimated insolvency at the time of repossession was K850 million.
Bank of Zambia (BoZ) Governor, Denny Kalyalya, explained that the buffer was expected to go up once the statement of Affairs was ready.
Read more: Just In: Bank of Zambia takes over Investrust Bank due to insolvency
Further, the Central Bank announced that depositors of Investrust Bank PLC in possession are expected to receive their money from April 26, 2024 when the first payment would be made, with the maximum payment of K500,000.
Addressing journalists in Lusaka on Thursday, Kalyalya said: “This fiscal support is critical in the context of the need to protect the integrity of the financial system and to support other key measures to promote growth and financial inclusion including the recent conclusion of debt restructuring with bondholders.
“Having a failed institution if not addressed properly creates other challenges which we do not want to have given what we have been through, so this is what compelled the government to step in to provide this fiscal support,” he said.
Kalyalya said the Central Bank was in the process of preparing a Statement of Affairs which was expected to be ready in the next six weeks.
He said all depositors were expected to have full access to their funds on the basis of the Statement of Affairs once the BoZ had decided the resolution option.
“May I assure depositors that their deposits are safe as the government will provide support to bridge the gap between the assets and liabilities of the Bank in possession,” he said.
Giving further information, Deputy Bank Governor-Operations, Francis Chipimo, said the Central Bank would facilitate the first payment to all the depositors of up to a maximum of K500,000.
“The BoZ plans to make the first payment by April 26, 2024. If this can be done sooner, it will. The BoZ will facilitate the first payment to all the depositors up to a maximum of K500, 000.
“This payment will cover over 90 percent of the total deposit accounts. Those that have deposit at or below K500, 000 will get payments that fully cover their deposits during this first payment period,” Chipimo explained.
He, however, noted that the Central Bank needed time to validate the depositor’s information which would require the full cooperation and patience of depositors.
Chipimo also encouraged customers with outstanding loans to remain current on their obligations, saying “the customers will be advised where to make their loan payments.”
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