Small depositors in Malawi’s commercial banks can now breathe a sigh of relief as the Reserve Bank of Malawi (RBM) is set to launch the Deposit Insurance Corporation (DIC), providing a financial safety net and boosting confidence in the banking sector.
Speaking at a media training in Blantyre on Monday, DIC Director General Chitani Chigumula said the Corporation is set to be launched on 10th October at an event which will take place at the Bingu International Convention Center (BICC) in Lilongwe.
Chigumula disclosed that the Corporation which was established last year under the Deposit Insurance Corporation Act of 2022, will provide insurance coverage for insured deposits from commercial banks, ensuring small depositors of reimbursement up to a certain amount in case of bank failure.
“The benefit enhancement of consumer confidence. We will come in when the bank has failed to pay the depositors. Once that happens, the depositors will have confidence that their monies in the bank are safe. This will contribute to the financial stability agenda.”
Chigumula added that this protection will also encourage individuals and businesses to save and invest, driving the country’s economic growth agendas.
In the meantime, DIC will cover commercial banks, with plans to expand to other financial institutions. However, capital markets will not be covered, as they have their mitigating measures.
The DIC’s launch demonstrates RBM’s commitment to safeguarding depositors’ interests and promoting financial stability, contributing to Malawi’s economic growth.
