This archive report was first published on 1 July 2020.
Kenya Deposit Insurance Corporation (KDIC) has taken a significant step to safeguard depositors' funds by increasing the deposit coverage limit from Sh100,000 to Sh500,000, effective immediately.
According to KDIC Chief Executive Officer Mohamud Ahmed, the new limit reflects the growth in the economy and will provide protection to depositors in the unlikely event of a bank failure.
With the new limit, customers who have up to Sh500,000 in deposits will recover all their money in the event their lender is liquidated.
KDIC says the new limit will cover 99% of depositors with funds in banks and deposit-taking microfinance institutions.
Additionally, KDIC has waived annual premiums for commercial banks for six months to December 2020 in light of the Covid-19 pandemic and deferred the risk-based premium model scheduled to commence tomorrow by a year.
“We have also decided to waive the premium of 0.15% of deposits that banks are required to make from July to December,” Mohamud said. “While this will impact our revenue streams, we hope to offer banks a reprieve to invest that money in other areas.”
Since the Central Bank of Kenya put at least three banks under receivership, KDIC has ramped up its mandate in recent years, including the collapse of Imperial Bank following the death of founder Abdulamek Janmohamed in 2016.
