DIB Operations Manager, Ms Rosemary Tenga, said the current maximum coverage of 1.5m/- per depositor per bank provides full protection to 91.5 per cent of all depositors in the banking industry.
“The limit is in line international best practice as advocated by the International Association of Deposit Insurers (IADI) which requires such institutions to cover at least 90 per cent of all depositors,” she said.
According to Ms Tenga, the maximum coverage limit is the maximum amount of money a depositor of a licensed bank or financial institution will automatically be paid by DIB in the event such an institution has failed.
In this context therefore according to available data, depositors with deposit balance of up to 1.5m/- account for 91.5 per cent of all depositors in the Tanzanian banking industry.
As of June, 2014, Tanzania has a total of 51 licensed banks and financial institutions. Tanzania is a member of IADI and one of a few countries in Sub Saharan Africa with a deposit insurance system. Others are Nigeria, Kenya, Zimbabwe, Sudan, Ghana, Malawi, Lesotho, Rwanda and South Africa.
Ms Tenga, however, insisted that the maximum coverage limit offered by DIB is not static and as such DIB does a regular review of the limit basing on various economic indicators to ensure that it does conform to the performance of the economy. The current maximum coverage limit per depositor per bank of 1.5m/- was set in 2010 after it was reviewed.
The DIB Manager, Finance and Administration, Mr Richard Malisa, called upon banks and other licensed financial institutions in the country to continue strengthening good relations with DIB which he said is crucial for the country’s financial stability and the economic growth.
He also urged them to continue working by adhering to their professional ethics, abiding to laws and regulations that govern their business as this will eventually lead into minimizing chances of bank failures in Tanzania.
“We have had very good relations with banks, we want this to continue in the interest of our country,” he said.
DIB, which operates within the Bank of Tanzania (BoT), seeks to provide protection to small and unsophisticated depositors against risks of losing their deposits arising from a bank failure and thereby maintaining public confidence in the banking system which eventually contribute to the stability of the financial system in Tanzania,” Mr Malisa said.