SC Finance Shines Light on Deposit Insurance Scheme

Standing Committee on Finance

The standing committee on finance has called for legislation establishing a comprehensive deposit insurance scheme to be drawn up.

In a statement, the committee added that the proposed legislation will safeguard depositors’ funds in cases where banks collapse.

According to the Prudential Authority, the “process of establishing and refining the legislation, policies and other legal instruments necessary to effectively manage a financial crisis as well as to affect the orderly resolution of failing financial institutions is on-going.”

The design of a resolution framework and the establishment of a deposit insurance scheme for South Africa are key developments currently underway.

The committee expressed concern at the way in which depositors at VBS Mutual Bank are being treated.

The committee also called for a swift conclusion to the investigations currently underway on the matter.

“We urge that all the current investigations into wrongdoing by those within and outside the bank, including within the government, be completed swiftly and efficiently – and those identified as the wrongdoers to face the full might of the law.”

The committee wants the inquiry report, once completed, to be presented to it so that further action on the matter can be considered.

Sabinet Cape Town Office