The Kenya Deposit Insurance Corporation (KDIC) has unleashed a raft of measures that will minimize risk to customers’ deposits in banks.
Increased coverage limit
The corporation has increased the coverage limit from KSh100,000 to KSh500,000 with effect from July 1, 2020 to reflect the sustained growth in the economy. The new limit will give more protection to depositors in the most unlikely event of a bank failure.
Extending premium payment period
In addition, the corporation has extended the payment of annual premiums for six months as a relief to banks during the COVID19 pandemic. Banks are required to pay annual deposit insurance premiums in the month of July. In this case, the premiums will now be due at the end of December 2020.
Deferment of Risk based Premium Model
KDIC has deferred the risk-based premium model that was scheduled to take effect in July 2020 by one more year. Last year the corporation rolled out the risk-based model to assess the premium payable by banks. In effect, this would have seen the premiums charged to banks increase and would have affected their cashflows during this pandemic.
KDIC says the measures will protect depositors’ funds in regulated commercial banks and ensure the banking system is safe and secure.
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