What depositors will receive if banks fail —Bank of Zambia

The Bank of Zambia (BoZ) has assured members of the public that depositors were protected by the Zambia Deposit Insurance Scheme (ZDIS), which guaranteed reimbursement of up to K250,000 per depositor if a licensed bank or deposit-taking financial institution fails.

The central bank said the K250,000 coverage limit was the maximum amount that would be paid to each depositor per institution, including interest earned up to the date the institution was closed.

“The coverage limit for the Zambia Deposit Insurance Scheme is currently set at K250,000 per depositor per institution and represents the maximum amount the Bank of Zambia will reimburse you if your bank or deposit-taking financial institution closes or fails,” BoZ said in the scheme.

According to the Bank, the scheme was established in October 2025 to protect depositors, strengthen confidence in the financial sector and promote the stability of Zambia’s banking system.

BoZ explained that the insurance applied to the total amount held by a depositor in one financial institution.

For instance, a customer with K245,000 in deposits would be reimbursed the full amount if the institution failed.

However, a depositor with K280,000 would receive K250,000 under the scheme, while the remaining K30,000 would be recovered through the liquidation process.

The central bank said the K250,000 coverage threshold was designed to protect the majority of depositors while ensuring that larger depositors continue to exercise prudent judgement when choosing financial institutions.

BoZ also outlined the compensation process, saying it would issue a public announcement within seven days of a bank being placed under compulsory winding-up.

The notice would explain how affected customers can submit claims, the documents required and where payments will be processed.
The Bank said insured depositors would begin receiving payments within 30 days after the claims process has been announced, although interim payments may be made where further verification is required.

However, BoZ said payments may be temporarily withheld where accounts were subject to court orders or where depositors are under investigation for offences such as fraud or money laundering.

Reimbursements may also be delayed for senior officers and external auditors of failed institutions if investigations into their conduct are still underway.

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