Reserve Bank launches insurance firm to safeguard bank deposits

The South African Reserve Bank (SARB) has officially unveiled the Corporation for Deposit Insurance (CODI).

This newly established entity, launched in Sandton on Thursday, marks a significant stride in enhancing trust and safeguarding depositors’ interests within the domestic banking sector.

CODI’s primary objective, as outlined by the SARB, is to protect qualifying depositors in the event of a bank failure. These include individuals and non-financial businesses. 

Mitigate risks within the banking landscape

The establishment of CODI aligns with the SARB’s mandate to ensure financial stability and mitigate risks within the banking landscape.

Under CODI’s coverage, each qualifying depositor per bank is guaranteed protection of up to R100,000. This provides a crucial safety net for vulnerable depositors.

Notably, this coverage extends to depositors across various banking institutions. They include commercial, cooperative, mutual banks, and local branches of foreign banks.

“Prior to CODI’s introduction, South Africa did not have an explicit deposit insurance scheme. [This] …compelled the government to use taxpayers’ money to compensate affected depositors on a case-by-case basis,” explained the SARB.

With the inception of CODI, the burden on taxpayers is alleviated. This is because the Deposit Insurance Fund is supported by contributions from member banks, SARB said. The insurance fund is maintained and administered by CODI.

“Under the auspices of the Financial Sector Regulation Act 9 of 2017 (FSR Act), CODI has established, and will maintain and administer a Deposit Insurance Fund. The fund is supported by monthly premiums and loan contributions by member banks. …This reduces the financial burden on taxpayers.”

Twin Peaks model

Finance Minister Enoch Godongwana hailed the launch of CODI. He said it’s a pivotal step in overhauling the country’s financial regulatory structure. The minister also emphasised CODI’s role in advancing the Twin Peaks model.


The Twin Peaks model represents a comprehensive regulatory framework. It is aimed at enhancing financial stability and consumer protection.

It divides regulatory responsibilities into two distinct areas. This ensures robust oversight of financial institutions while safeguarding consumer interests.

He emphasised the importance of trust in the financial system. Government is committed to fostering greater transparency and accountability. Also public inclusivity in regulatory processes, he said.

Restoring public trust in financial regulation

He commended the SARB for its steadfast efforts in implementing reforms aimed at restoring public trust in financial regulation.

“Regaining public trust in financial regulation requires deep structural reforms. Also a shift towards greater accountability, transparency, and public inclusivity.

“Let’s continue to guide our regulatory processes with the principle that they should serve the broader populace. And… maintain the integrity of an economy that thrives on the trust and confidence of its people,” Godongwana said.

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