The Corporation for Deposit Insurance (CODI) ensures the safety of bank deposits, strengthens the resilience of the banking system and will increase customer trust and confidence in banks.

Under the scheme, which has been in operation from 01 April 2024, depositors will receive up to R100 000 of the money in their qualifying accounts, in the unlikely event that a bank fails. Qualifying accounts include:current accounts, transactional accounts, savings accounts, term and notice accounts and Islamic Murabaha products, among others.

South African banks are sound and well-regulated. The Prudential Authority of the South African Reserve Bank (SARB) closely supervises banks to ensure that they are investing and lending depositors’ money in a responsible manner, and are able to repay their depositors, when required.

However, it is international best practice for countries to have a deposit insurance scheme. Until now, South Africa was the only member of the Group of Twenty (G20) countries, which did not have an explicit deposit insurance scheme. In the past, tax money would have to be used to bailout a distressed bank and depositors faced a lengthy and uncertain wait to be paid-out.

Now, with CODI operational, customers of a distressed bank will know when and how their money will be paid out. A subsidiary of the SARB, CODI is funded by the banking industry through premiums and levies, and a clear reimbursement process for depositors is in place.

All South African banks are by law members of CODI, so the qualifying accounts in every bank are automatically protected. Depositors do not have to register with CODI to be covered. They can simply inquire with their banks if their specific accounts qualify for CODI protection.

BASA Managing Director, Bongiwe Kunene, says of the insurance scheme: “The strength, stability and responsible management of South African banks is an essential business and economic asset for South Africa, which helps to attract and facilitate domestic and foreign investment. Banks are participating in this scheme because CODI helps to further strengthen business and customer trust and confidence in banks.” Kunene serves on the board of CODI BASA congratulates CODI, the SARB and our member banks for working diligently and cooperatively in achieving this important milestone.