Regulatory Alerts2009-12-18
Banking Circular No 11 of 2009 - Disclosure of Deposits to Deposit Protection Fund Board
This circular highlights the importance of accurately disclosing all deposit products to the Deposit Protection Fund Board (DPFB) for adequate protection and cover under the Banking Act. Starting from January 1, 2010, commercial banks, non-bank financial institutions, mortgage finance companies, and deposit-taking microfinance institutions must include various types of deposits such as foreign currency deposits and transaction accounts in their monthly returns to DPFB for insurance premium assessment. However, inter-bank placements will not be included in the return when determining protected deposits cover.
IST & 2ND FLOOR, MARSHALL HOUSE, HARAMBEE AVENUE, P. O. BOX 45983 - 00100 NAIROBI, KENYA, TEL: 2863800, 2217400/1/2/3/4, FAX: 2211122 18 December, 2009 BANKING CIRCULAR NO. I I OF 2009 ALL CHIEF EXECUTIVES OF COMMERCIAL BANKS, NON-BANK FINANCIAL INSTITUTIONS, TO: MORTGAGE FINANCE COMPANIES AND DEPOSIT TAKING MICROFINANCE INSTITUTIONS DISCLOSURE OF DEPOSITS TO DEPOSIT PROTECTION FUND BOARD The banking industry has continued on a growth trajectory in response to globalization, technological advancement, competition, economic vibrancy and increased customer sophistication. This has called for aggressive marketing re-orientation of products and services resulting not only in deposit growth but also in new and diverse deposit products. This has been in efforts to meet the ever changing customer needs and preferences as well as reach the un-banked. It is therefore necessary to reiterate the importance of disclosing all deposit products to DPFB for adequate protection and cover as provided under the Banking Act.
In the foregoing, and in order to ensure that the requisite insurance cover is provided, member institutions are required to re-state correctly, the deposits that form the input to CBK/DPF I (revised) monthly return. Consequently, and with effect from January I 2010, member institutions registered under the Deposit Protection Fund Board are required to list the deposits for purposes of insurance premium assessment to include any products in the market that are deposits in nature such as foreign currency deposits and transaction accounts as follows:- Current Account Deposits o Savings Account Deposits o .
Call Deposits Fixed/Term Deposits .
Member institutions are further required to observe that inter-bank placements do not form part of the insured deposits and will therefore not be included in the return in determining protected deposits cover. The DPFB return must be accompanied with a reconciliation statement between the return and Monthly CBK/BSM.
DIRECTOR, DEPOSIT PROTECTION FUND BOARD