SARB launches new deposit insurance body

The South African Reserve Bank (SARB) recently launched a new deposit insurance scheme called the Corporation for Deposit Insurance (CODI) in an effort to enhance trust in the country's financial system. The scheme aims to provide up to R100,000 to cover each qualifying depositor per bank, ultimately safeguarding the interests of customers and bolstering confidence in the banking sector. During the launch event, Mampho Modise, the newest member of the SARB's Monetary Policy Committee, shared insights into the rationale behind the introduction of the deposit insurance scheme. Modise emphasized that the primary objective of CODI is to protect depositors and ensure timely access to their funds, thereby mitigating the risk of panic in the financial system. While the regulation aims to address the issue of 'too big to fail' for South Africa's largest banks, CODI's core focus remains on safeguarding depositors' interests. In an exclusive interview with CNBC Africa, Modise highlighted the critical importance of regulatory oversight and consumer protection in the banking industry. She underscored the need to prioritize the protection of vulnerable individuals within the community, stressing the significance of maintaining a stable and secure financial environment for all depositors. As a member of the Monetary Policy Committee, Modise will oversee the CODI system in addition to managing the financial stability, risk, fintech, and statistics portfolios. With a wealth of experience in the banking sector, including a previous internship at the SARB, Modise expressed enthusiasm for her upcoming role in the MPC and underscored her commitment to contributing effectively to the committee's decision-making processes. Reflecting on her return to the SARB after a hiatus of 20 years, Modise acknowledged the differences in the institution while praising the unwavering support she received since rejoining. She lauded the collaborative environment and expressed readiness to delve into her responsibilities, signaling a proactive approach towards addressing the evolving needs of the financial landscape. With the advent of the CODI scheme and Modise's appointment to the Monetary Policy Committee, the SARB is poised to strengthen its regulatory framework, enhance consumer protection measures, and bolster confidence in South Africa's banking sector. The launch of CODI marks a significant milestone in the ongoing efforts to fortify the country's financial system and foster a culture of transparency, security, and stability for depositors nationwide.