Insurance coverage will be provided for depositors with deposit amount up to 200,000

 

 

National Bank of  Ethiopia stated that insurance coverage will be provided to those who have deposits  banks and microfinance institutions. The deposit insurance fund, which was recently established to guarantee depositors in banks and microfinance institutions, has announced that it will provide insurance to those who have deposits of up to 200 thousand birr.

 

For the implementation of this strategy, it has been stated that banks and micro-financial institutions are required to contribute 0.2% of their deposits to the fund every year.

 

The deputy governor mentioned that there will be a fee to be paid by the banks when the deposit guarantee fund service starts, but explained that the amount has not been decided yet.

 

The insurance coverage is for people who have a deposit amount of up to 200,000 ETB

 

It is said that the amount of the insurance coverage is decided to provide the guarantee cover for the deposits up to 200 thousand birr because about 96 percent of the depositors of the banks and the microfinance institution have the average amount of their deposits as mentioned.

 

Currently, the total amount of deposits of 32 banks is 1.87 trillion birr, and when the deposits of small financial institutions are added, the total deposits of the financial institutions are said to reach two trillion birr. Therefore, when the depositors’ money is guaranteed by the current deposits, banks, and insurance companies in the first year, from four billion

 

The deposit insurance fund was established and put into operation to ensure that banks and microfinance institutions have insurance for depositors in case of a disaster, and such a practice is common in other countries.

Mamo Mehretu, Governor of the National Bank of Ethiopia recently explained about the fund. The Governor stated that the Government allocates 2 million in start-up capital for the fund and the fundraising money from the Banks is to be collected through the account opened by the National Bank.