By Drake Nyamugabwa
A newly established institution known as; “The Deposit Protection Fund” (DPF), has been operationalized by the Central Bank of Uganda. This follows the enactment of the Financial Institutions (Amendment) Act (FIA) 2016, aimed at acting as a deposit insurance scheme for customers of contributing financial institutions.
A statement from Bank of Uganda (BOU), reveals that the central bank of Uganda has seconded an interim team of officials to operationalize the Deposit Protection Fund and that it will be funded by regulated financial institutions, which pay premiums. “It will work by ensuring that premiums remitted by financial institutions regulated by the Bank of Uganda are securely maintained and invested prudently”, reads the statement in part.
The Chief Executive Officer of DPF, Julia Oyet says that; since DPF now has its own Board and Management, it will be expected to help the Fund grow in leaps and bounds, as more opportunities for investment are.
“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 savings.” she said.
Oyet adds that the establishment of the DPF as a body corporate is yet another step in efforts to strengthen the financial sector and through the provision of a robust framework for the protection of depositors’ funds. The officials seconded from the Bank of Uganda to the DPF are: Julia Claire Oyet-Chief Executive Officer, Peter Mugisa-Head Investments and Risk Management, Rosette Muhimbise-Head Administration and Liaison and Proscovia Namwanje; Administrative Assistant.
Prior to the amended of Financial Institutions (Amendment) Act 2016, the Deposit Protection Fund (DPF) was under statutory management of Bank Of Uganda. Under the new law it is now a separate legal entity from Bank of Uganda. As at 31st May 2017, the market value of the Fund stood at shs 465 billion.