July 11— Any conflict of interest Bank of Uganda might have had in previously overseeing the Deposit Protection Fund (DPF) is now gone after amendments to the relevant law were passed earlier this year and an inaugural Board recently appointed to direct DPF affairs.
Julia Clare Oyet, the new CEO said, “DPF now has its own Board and Management, and this is expected to help the Fund grow in leaps and bounds as more opportunities for investment are explored. Furthermore, the Fund will now have proper procedures to ensure depositors are quickly paid off in the case of a bank failure.”
As at May 31 2017, the market value of the Fund stood at UGX 465 billion (about $130 million). This is money contributed by all licensed financial institutions on a regular basis towards a pool to cover depositors’ cash in case a bank runs into trouble.
DPF will pay off depositors up to an amount of UGX 3,000,000 if a financial institution is closed; however, the possibility of raising this limit is being reviewed.
Oyet has been seconded from BoU to become CEO, along with Peter Mugisa, (Head Investments and Risk Management); Rosette Muhimbise, (Head Administration and Liaison) and Proscovia Namwanje, (Administrative Assistant).
She said, “The Fund will also act as the second watchful eye over the sector, and will liaise with the Bank of Uganda to ensure safety and soundness of the financial sector. The public should know that their deposits are well protected; people should put their money in regulated financial institutions and enjoy the benefits of financial inclusion which include access to cheaper credit and ability to access your savings.”
The Financial Institutions (Amendments) Act 2016 allows the BoU power to appoint DPF as receiver or liquidator of a financial institution if the need should arise.