DEPOSIT Insurance Scheme (DIS) is working on upping the maximum amount that a depositor should get when a bank goes under liquidation.
The DIS, which operates under Bank of Tanzania (BoT), said the review is vital due to the expansion of the economy pushing the country to low-middle income bracket.
The Acting Director Deposit Insurance Board Mr Richard Malisa said last time the review of the maximum amount was a decade ago which warranted a top payout of 1.5m/-, saying: “Yes, we are working on the issue. It’s almost over a decade since we reviewed the amount.”
DIS started to pay a maximum amount of 250,000/- since it was established in 1994 and upped to 500,000/- in 2003 before again increased to 1.5m/- in 2010.
Also the fund size have increased to 626.1bn/- mid last year after paying depositors of the collapsing banks from the government’s seed amount of 1.5bn/- in 1994.
The global standard showed that on average a number of insurance schemes for depositors reach 90 per cent of compensation amount.
“Though we haven’t revised the amount for a decade, but DIS compensation level is well above the global average,” Mr Malisa said.
On the duration taken to pay a depositor after a bank collapses, Mr Malisa said the global average is seven days, but in Tanzania it takes two months due to a number of challenges particularly reaching depositors staying away from banking services.
The quicker way, he said is paying depositors using mobile money services but some have registered a different name for telephone and bank account.
“National IDs will assist us a great length on quickening payments as we can send the amount at cheap price to depositors using mobile phones,” he said.
DIS data showed that it has already reimbursed merely 39 per cent equivalent to 11 million depositors of the seven banks which went under in the last two years.