SARB launches country's first deposit insurance body, covering up to R100K
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GUEST – Kuben Naidoo is a deputy governor of the SARB
The South African Reserve Bank has established SA’s first deposit insurance body, the Corporation for Deposit Insurance (CODI), to help protect bank depositors as well as with confidence in the financial sector. CODI became a legal entity on 24 March, and the move makes protection of those with money in a bank explicit, rather than the "implicit" protection already on offer, Reserve Bank governor Lesetja Kganyago has said previously. In the past, the government compensated depositors for their losses on a case-by-case basis, meaning taxpayers had to bear the cost of the failure of banks. When a bank failed, there was uncertainty about which depositors would be compensated, the amount of protection provided and where the funding would come from, the SARB said in October.
The South African Reserve Bank has established SA’s first deposit insurance body, the Corporation for Deposit Insurance (CODI), to help protect bank depositors as well as with confidence in the financial sector. CODI became a legal entity on 24 March, and the move makes protection of those with money in a bank explicit, rather than the "implicit" protection already on offer, Reserve Bank governor Lesetja Kganyago has said previously. In the past, the government compensated depositors for their losses on a case-by-case basis, meaning taxpayers had to bear the cost of the failure of banks. When a bank failed, there was uncertainty about which depositors would be compensated, the amount of protection provided and where the funding would come from, the SARB said in October.
