RBM to launch Deposit Insurance Corporation (DlC) next week
Reserve Bank of Malawi (RBM) has announced that will be launching Deposit Insurance Corporation (DlC), a company which has been set up under the Parliamentarian Act 2022.
Speaking during a half day workshop at RBM offices in Lilongwe, DIC Director General, Chitani Chigumula confirmed that it’s true the company has indeed started its operations and is based in Blantyre.
The DG said the company has been established under the Deposit Insurance Corporation (DlC) Act of 2022, effective from October 1, 2020.
He said the main objective of the DIC is to protect deposits from the risk of losing them if a bank fails.
He said, t¹he establishment of the DIC is based on best practices from other countries, including Kenya, Nigeria, and Zimbabwe, which have had similar schemes for over 20 years.
He said the DIC is modeled after the Federal Deposit Insurance Corporation in the USA, which was established in the 1930s following the Great Depression.
He saud research on the concept of deposit insurance began in Malawi around 2012, leading to the enactment of the act.
On what is expected on the launch, the Director General said “The expectation is that the DIC will be launched, and obviously we have invited the guests, the guest of honor, will be the Minister of finance.
He said the RBM Governor, Dr Wilson Banda will obviously be there as a main player. He said the other distinguished guests will be members of the Insurance Associations, International Association of people’s insurance and other guests from Switzerland.
He said from the Banking fraternity, “We have invited all the banks and other institutions to join us at the launch which will take place at the Bingu International Conference Centre (BICC),” he said.
According to the Director General the company will ensure that funds of insured institutions are fully protected.
DIC will also be resident to make payments to clients of failed insured institutions up to insured amounts.
He said DIC will act as statutory manager or liquidator of insured institutions upon appointment by Registrar of Financial Institutions.
“DIC will Supervise failing insured institutions upon permission by RFI as well as Recommending closure of a failing insured institution to RFI while at the same time Managing deposit insurance funds,” he said.
Political Commentator Dr Ben Dzolowere has since hailed RBM for launching this company.
He said in other countries these are the companies which Provides financial assistance to insured institutions in case of financial difficulties as well formulating investment policies and oversee DIC’s investments.
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