Is my money safe in a South African Bank?

It feels so far-fetched to imagine working so very hard to put savings away in prudence – only to go to your Bank to find out that they have gone bust or that a minimum withdrawal is allowed. One should not imagine too long… for such scenarios have happened before and I believe will happen again. Most people can remember South African’s largest unsecured lender, African Bank which collapsed in 2014 or of recent events when the people of Greece was only allowed to withdraw sixty Euros per day.

Most people believe that their Bank will have some sort of insurance to payout client’s for their losses but sadly there is none and many have been waiting for a while. However the reality is that for some time now the International Monetary Fund (IMF) has been urged South Africa to implement a deposit insurance scheme to provide a safety-net in the event of a Bank collapse.

Deposit insurance is a safety net that bank regulatory authorities use to attempt to prevent and mitigate the costs of bank failures.  However it is true that Bank failures are rare, but they usually happen very sudden.

One would assume that the protection of clients money matters for Banks however the fact of the matter is that they don’t really care about their clients. One would assume that the Government would have the people’s interest at heart yet they are focusing on the element that having such a scheme will only hinder the growth of small up and coming Banks and that it may cause Banks to become reckless and take higher risks. However sadly the Clients of the banks are secondary for their profits are the primary customer service. The Government would not mind using Tax-payers money to bailout failing Banks but having to implement legislature so to compensate citizens for losses are also secondary.



Country Maximum deposit compensation guarantee in local currency (sterling equivalent in brackets, as at 6 May 2014)
Kenya (Deposit Fund Protection Board) KS100,000 (£800)
Nigeria (Nigeria Deposit Insurance Corporation) NN500,000 (£1,870) for universal banks, NN200,000 (£740) for micro-finance banks and primary mortgage banks
South Africa None – currently under consideration
Ghana None – currently under consideration
Egypt None for private-sector banks, some implicit deposit insurance for public-sector banks
United Arab Emirates None – currently under review. Deposits were fully guaranteed after the global financial crisis of 2007/08, but have now lapsed.
Qatar None
Oman (Deposit Insurance Authority) RO20,000 (£31,800) or 75 per cent of net deposit, whichever is less
UK (Financial Services Compensation Scheme) £85,000. Foreign currency deposits included. Customers’ loans or debts to the failed bank will not be deducted from the compensation payment
Other European Union members (implemented through independent national deposit protection funds – sometimes more than one scheme per country) European Union rules prescribe coverage of €100,000 (£82,050). Foreign currency deposits included.
Isle of Man (Depositors’ Compensation Scheme) £50,000. Foreign currency deposits included.
Jersey (Jersey Banks Depositors’ Compensation Scheme) £50,000. Foreign currency deposits included.
Guernsey (Guernsey Banking Deposit Compensation Scheme) £50,000. Foreign currency deposits included.
Switzerland (esisuisse) CHF100,000 (£67,250). Foreign currency deposits included.
Singapore (Singapore Deposit Insurance Corporation) S$50,000 (£23,700).
Hong Kong (Deposit Protection Board) HK$500,000 (£38,700). Foreign currency deposits included.
USA (Banks: Federal Deposit Insurance Corporation, Credit Unions: National Credit Union Administration) US$250,000 (£152,950). Foreign currency deposits included. Limit applies per person per category of account, so accounts in different categories of ownership may be capped separately.



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