If the answer to any of these questions is a yes, we have the perfect solution for you!
Overview of Deposit Insurance Mandate
In collaboration with the SARB, CODI is set to launch the Deposit Insurance Scheme (DIS) in April 2024. This initiative aims to fortify the financial safety net, ensuring depositor protection in the unfortunate event of a bank failure. The DIS establishes and administers the Deposit Insurance Fund (DIF), a pivotal resource safeguarding covered depositors during resolutions.
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IRIS has a long-standing relationship with South Africa, having implemented supervisory solution for the Companies and Intellectual Property Commission (CIPC), South Africa. Additionally, more than 1600 entities across SA use IRIS' filing solution to submit their filings to CIPC.
IRIS has also implemented a reporting platform for Central banks in several Asian and African countries, such as the Reserve Bank of India, Nepal Rashtra Bank, Central Bank of Jordan, and Bank of Mauritius, to name a few.
iDEAL Deposit Insurance Reporting Solution (DIRS)
DIRS, a uniquely crafted solution for member banks of CODI lets you prepare single
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The Deposit Insurance Scheme not only mandates banks to submit depositor information but also obliges to pay levies and premiums to fund the DIF and maintain a minimum liquidity amount. Banks not only need a technology solution but also expert consulting services to prepare for the mandate. IRIS is trusted by over 200 banks, credit institutions, and investment firms worldwide for over a decade.
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Frequently Asked Questions
The Corporation for Deposit Insurance (CODI) was established on 24th March 2023 with an objective to support the South African Reserve Bank’s (SARB) financial stability mandate and focus on protecting the qualifying depositors of banks.
CODI will manage the country’s Deposit Insurance Fund (DIF) that will allow for bank depositors to have access up to a stipulated limit of their deposits should their banking institution fail, be liquidated, and placed into resolution, thereby enhancing public confidence in the country’s banking system. CODI is also mandated to promote awareness among financial customers of the protection it offers.
A Deposit Insurance Scheme (DIS) provides a mechanism to ensure a pre-planned, orderly, and efficient provision of protection to depositors and more importantly, depositors will know when they will have access to their deposits at a failed bank.
To fulfil this objective, CODI must establish, maintain, and administer the deposit insurance fund (DIF) in the interest of the qualifying depositors’ covered deposits and promote awareness among financial customers of its protection.
The FSR Act establishes the overarching, high-level framework for CODI’s establishment, with CODI maintaining and administering a dedicated DIS. Utilizing the Deposit Insurance Fund (DIF), CODI will ensure access to covered depositors’ deposits within a reasonable timeframe in the event of a bank failure.
CODI will safeguard banking products with guaranteed and repayable capital amounts, such as savings and checking accounts, while investment products will not be protected.
For instance, in the event of a bank liquidation, CODI will utilize the DIF to compensate covered depositors through electronic funds transfers (EFTs) or via a payout agent bank. The proposed protection for qualifying depositors will be up to a coverage limit of R100,000 per depositor per bank.
All registered banks, including 17 commercial banks, 3 mutual banks, 6 cooperative banks, and 12 local branches of foreign banks are the present members of CODI. Membership to CODI is mandatory and automatic for all registered banks.
Member banks must adhere to the following:
- Furnish CODI with depositor information
- Pay levies and premiums to fund the DIF
- Maintain a minimum liquidity amount, as specified by CODI
CODI will automatically provide protection to deposits, eliminating the need for depositors to apply for coverage. It will safeguard deposits held by both natural and non-financial persons, offering up to R100,000 per qualifying depositor per bank.
The protection under CODI extends to qualifying products with guaranteed and repayable nominal balances. Sole proprietors’ qualifying accounts would receive separate coverage from their personal bank accounts, with a limit of R100,000 if the accounts used for the sole proprietor business can be identified by the bank.
For qualifying depositors holding deposits in foreign currencies, the coverage extends up to the R100,000 limit. In the event of a bank failure, foreign currency balances will be converted to South African rand before depositor compensation is provided.
Upon its establishment, CFIs will not be members of CODI, but CODI will take steps to incorporate CFIs into the deposit insurance framework.
CODI will provide coverage for positive balances in transactional or savings accounts held by a qualifying depositor in the event of their bank’s failure. However, loan accounts or overdrawn balances on transactional accounts will not be covered by CODI.
Yes, CODI provides protection up to R100,000 per qualifying depositor, per bank.
Unclaimed deposits will remain with the failed bank and the liquidator will manage them according to the creditor hierarchy.