Deposit Protection Fund depositors grow to 19m

Customers in a banking hall. The Deposit Protection Fund uses your personal information as provided to the bank to offer you deposit insurance when your bank closes. PHOTO/Kelvin Atuhaire

What you need to know:

The Deposit Protection Fund annual report and Financial Statements for the Financial Year 2019/2020 indicated an increase in the number of accounts from 14 million to 16.7 million over the period

The Deposit Protection Fund of Uganda (DPF) has registered growth of over 1 trillion as of September 2021 due to increased number of depositors.

DPF is a government agency that provides deposit insurance to customers of deposit-taking institutions licensed by Bank of Uganda such as commercial banks, credit institutions and micro finance deposit taking institutions (MDIs).

“Over the past five years, the fund size increased from Shs473 billion as at June 2017 to over Shs 1 Trillion as at September 2021,” Ms Julia Olima Oyet the DPF chief executive officer,  said.

Speaking during the commissioning of the DPF offices in Kampala yesterday, Ms Oyet attributed the growth to the contributing institutions that have continued to pay their premium on time. 

This has been thorough collaboration with the DPF to ensure that depositor information is updated to reflect amongst others, National Identification Numbers (NIN) and alternative modes of payment.

She added: “The deposit insurance limit was increased from Shs3million to Shs10 million. At this limit, 19 million out of the 19.4 million deposit accounts in the sector are fully covered which constitutes 98 per cent of total deposit accounts in the sector.”

The Deposit Protection Fund annual report and Financial Statements for the Financial Year 2019/2020 indicated an increase in the number of accounts from 14 million to 16.7 million over the period.

She noted that in order to ensure depositors are paid fast in the unlikely event that their financial institution is closed for outright liquidation, the Fund embarked on implementing a multi-billion payout system.

“With this system, the fund will obtain depositor records from contributing Institutions on a regular basis. This will enable the Fund conduct detailed analysis of the deposit liability it holds in the industry and prepare in good time, in the event of a bank closure,” Ms Oyet added.

While representing the Minister of Finance Matia Kasaija, Mr Moses Kaggwa, director budgeting, Ministry of Finance applauded the growth of the fund noting that establishing a separate entity to focus on ensuring depositors are not only protected but that they have confidence in the financial sector especially in the unlikely event of bank closure and during the uncertainty within the economy; noting that it was a good idea.

“I am glad to see and note that what led to the birth of the fund to ensure its independence having been managed and housed by BoU has been attained. This will contribute to the financial sector stability,” he said.

He urged Ugandans to take advantage of the insurance offered by the DPF by depositing their hard-earned savings in the institutions that are regulated. This means that unlike in the past where banks would collapse and depositors go to BoU for repayment, this is now being covered by DPF.

Welcome!

You're all set to enjoy unlimited Prime content.