CEO’s Breakfast Meeting with CEOs/MDs of Contributing Institutions – December 19, 2022

In line with the Fund’s mandate, the Chief Executive Officer, Mrs. Julia Clare Olima Oyet, held a breakfast meeting with CEOs/MDs of Contributing Institutions on December 19, 2022. The purpose of the engagement was to update them on the key undertakings of the Fund which required their involvement.  The meeting drew participants from all the 33 Contributing Institutions which included; commercial banks, credit institutions and microfinance deposit taking institutions .

Mrs. Julia Oyet informed the participants that deposit insurance started in the USA in the 1930’s out of the need to protect vulnerable and uninformed small depositors from the risk of losing their savings in the event of bank failures or closures. It however gained global prominence during the 2007/8 financial crisis. She further noted that deposit insurance contributes to maintaining confidence in the banking sector, because majority of the depositors are not worried about losing their money, and therefore, don’t create panic in the sector in case of unfounded rumors.

Mrs. Oyet noted that Deposit Protection Fund (DPF) was established in 1994 following the enactment of the Financial Institutions Statute (FIS) 1993, and at that point its mandate was that of a paybox (Only responsible for payment of protected deposits). She added that in 2016, the Financial Institutions Act 2004 was amended. The change provided for DPF to operate as a legal entity and take on liquidation responsibilities if appointed by the Central Bank. As such, the Fund evolved from being a ‘paybox’ to executing a ‘pay box plus’ mandate.

Mrs. Oyet noted that membership is compulsory for all BOU Supervised Deposit Taking Institutions and that the current protected limit is UGX 10million per depositor, per supervised financial institution. She accentuated that at the current limit, 98 % of deposit accounts were fully protected which translates into 20.9 million accounts out of 21.3 million accounts as at Sept 2022.

In conclusion, Mrs. Oyet highlighted the following as the Fund’s on-going major projects:

1. Rolling out of the Depositor Pay-out and Premium Management System to Contributing institutions.
2. Working on a DPF Stand-alone law to expand the DPF mandate (contribute to resolution funding) in addition to managing pay-outs.
3. Conducting inspections of Contributing Institutions.
4. Holding regular engagements with CEOs of Contributing Institutions.
5. Conducting public awareness initiatives such as engagements with the frontline staff of CIs, holding TV and talk shows across the country as well as placing adverts on radio and TV.
6. Conducting customer satisfaction dipstick surveys.