SARB AND NATIONAL TREASURY PROPOSE DEPOSIT INSURANCE SCHEME

Publication Date: 01/06/2017

01 June 2017

STATEMENT BY CAS COOVADIA, MD OF THE BANKING ASSOCIATION SOUTH AFRICA

We have been engaged with the National Treasury and the SARB for some time. We recognise the need for a deposit insurance scheme, particularly given global prescripts. We will study the details of the document released for public comment and revert to National Treasury. However, we can state we are satisfied that the draft document goes some way to ensuring the scheme will not result in further costs to the banking industry because it suggests a reduction in cash reserve requirement from 2.5% to 2.0 % of liabilities.

The threshold of R100 000 ensures those most susceptible will be protected in the event of deposits being threatened because of bank failure. Having said that, we emphasise our banks are stable, well capitalised and liquid, and past failures have been adequately and appropriately resolved without dilution of depositor funds.

Ends