The Deposit Protection Fund has grown to a tune of shs1 trillion in the past five years, its CEO, Julia Clare Olima Oyet has said.
“The fund size has increased from shs473billion as at June 2017 to shs1 trillion as at September 2021,”Oyet said
She was speaking on Thursday during the commissioning of the Deposit Protection Fund offices in Nakasero, Kampala.
The Deposit Protection Fund is mandated to protect deposits by a certain percentage of the money they hold in the event that a bank collapses.
According to the CEO, they have made great strides from being a department under the Bank of Uganda to becoming autonomous, adding that during the five years of existence, the deposit insurance limit has been increased from shs3 million to shs10 million.
“At this limit, 19 million out of the 19.4 million deposit counts in the sector are fully covered. This constitutes 98% of the total deposit accounts in the sector.”
Oyet however urged depositors to update their details with the respective banks with their national ID numbers, alternative bank accounts and mobile money number to be used for paying depositors in case the bank is closed.
Ben Patrick Kagoro, the chairperson board of directors said they want a Deposit Protection Fund stand-alone law that will among others enable them participate in dissolution of challenged banks.
“We continue to work towards a stand-alone DPF law and it will allow us participate in financing the resolution of challenged banks so that they exit the banking sector in an orderly manner,” Ben Patrick Kagoro, the chairperson board of directors at the Deposit Protection Fund has said.
He explained that with the law in place, even if banks don’t exit the market but have some challenges, the Deposit Protection Fund can work out a way of liquidity management and bailing them out at a “reasonable” interest.
The DPF Chief Executive Officer, Julia Clare Olima Oyet said hey are also pushing for finalization of the framework to support funding from government in the event they don’t have enough money to pay depositors.
“Such funding would be called for in exceptional circumstances such as a national financial crisis, otherwise the DPF has sufficient funds to execute it mandate in normal times,”Oyet said.
The Finance Minister, Matia Kasaija pledged to support the Deposit Protection Fund to attain its plans.