Bank of Zambia Circular No. 03/2025 on Draft Deposit Protection Directives

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Bank of Zambia
OFFICE OF THE DEPUTY GOVERNOR - OPERATIONS

BOZ/EXEC/DG/prs/bp

January 10, 2025

CB Circular No. : 03/2025

To : All Heads of Commercial Bank
All Heads of Deposit Taking Non-Bank Financial Institution

REQUEST FOR COMMENTS ON THE DRAFT BANKING AND FINANCIAL SERVICES (DEPOSIT PROTECTION) DIRECTIVES, 2025

The Bank of Zambia is in the process of developing a legal framework to operationalize the Deposit Protection Fund, which aims to protect depositors’ funds in the event of a failure of a deposit-taking financial institution. This initiative will contribute to the stability of the financial system by providing assurance to depositors regarding immediate access to protected funds in such events.

In this regard, the Bank has developed the draft Banking and Financial Services (Deposit Protection) Directives, 2025, to operationalize the Fund. The Directives shall be issued pursuant to Section 132(5) and in exercise of the powers contained in Section 167 of the Banking and Financial Services Act, 2017.

The Bank, therefore, requests your respective institutions to review and provide comments on the draft directives in the format and manner outlined in the attached review template.

The comments should be submitted by January 22, 2025 to Mr. Vincent Suze: vsuze@boz.zm, Mr. Chimwemwe Munthali: cmunthali@boz.zm, Ms. Naomi Lungu: nlungu@boz.zm and a copy sent to your respective Desk Officers.

[Signature]

Francis Chipimo (PhD)
DEPUTY GOVERNOR

cc Governor
Director – Prudential Supervision

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COMMENTS ON THE DRAFT BANKING AND FINANCIAL SERVICES (DEPOSIT PROTECTION) DIRECTIVES 2025

NAME OF INSTITUTION: _________________________________________________ *Please add more rows under each Directive if you have more comments

Directive No.	Sub Directive	Current Provision	Proposed Amendment	Rationale for Proposed Amendment	Proposed action	Other Comment
PART I PRELIMINARY PROVISIONS
Directive 1: Short title
Directive 2: Interpretation
Directive 3: Application
PART II – THE DEPOSIT INSURANCE SCHEME
Directive 4: Establishment of the Scheme

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Directive No.	Sub Directive	Current Provision	Proposed Amendment	Rationale for Proposed Amendment	Proposed action	Other Comment
Directive 5: Objectives of the Scheme
Directive 6: Membership of the Scheme
Directive 7: Cessation of Membership
Directive 8: Effect of Cessation
PART III THE DEPOSIT PROTECTION FUND
Directive 9: Establishment of the Fund
Directive 10: Sources of Funds
Directive 11: Investment of the Fund
Directive 12: Target Fund Size
Directive 13: Application of the Fund

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Directive No.	Sub Directive	Current Provision	Proposed Amendment	Rationale for Proposed Amendment	Proposed action	Other Comment
Directive 14: Premiums to the Fund
14.1 Initial Premium
14.2 Annual Premium
14.3 Special Premium
14.4 Risk Based Premium
14.5 Premium Default
14.6 Non Transfer of Premium Cost
Directive 15: Prohibition of Premium Costs
Directive 16: Emergency Funding
Directive 17: Exclusions

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Directive No.	Sub Directive	Current Provision	Proposed Amendment	Rationale for Proposed Amendment	Proposed action	Other Comment
PART IV COVERAGE AND DEPOSITOR REIMBURSEMENT
Directive 18: Coverage Limit
18.1: Extent of Cover
18.2: Coverage of Joint Accounts
18.3: Coverage Rules for Trusts
18.4: Coverage for Mergers or Amalgamations
18.5: Limitation of Claim
Directive 19: Depositor Reimbursement
Directive 20: Currency Reimbursement
Directive 21: Subrogation
PART V FINANCIAL STATEMENTS OF THE FUND

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Directive No.	Sub Directive	Current Provision	Proposed Amendment	Rationale for Proposed Amendment	Proposed action	Other Comment
Directive 22: Books of Accounts and Records
Directive 23: Audits
Directive 24: Annual Reports
PART VI GENERAL PROVISIONS
Directive 25: Public Awareness
Directive 26: Submission of Information
Directive 27: Appointment of Agent
Directive 28: Assignment
Directive 29: Penalty for Non-Compliance
Directive 30: Duties and Powers of the Bank