Addis Ababa, Ethiopia (07 April 2023)
The Ethiopian Deposit Insurance Fund has been put into operation by the National Bank of Ethiopia, according to a report by the bank today. Created under Council of Ministers Regulation No. 482/2021, the fund was designed to provide a safety net for depositors and promote stability within the banking sector.
One of the key functions of the deposit insurance system is to provide protection to depositors and prevent bank runs. By compensating insured depositors of commercial banks and microfinance institutions, the Ethiopian Deposit Insurance Fund aims to maintain depositor confidence, preserve financial stability, and foster economic growth.
To achieve its objectives, the Fund will undertake a variety of activities, such as:
- Issuing directives
- Collecting premiums from financial institutions
- Managing resources, and
- Paying insured depositors in the event of a bank or microfinance institution failure.
The incoming Chief Executive Officer of the Fund is Ato Merga Wakweya, who currently serves as the Director of Microfinance Institutions Supervision at the National Bank of Ethiopia. His appointment by His Excellency the Prime Minister Dr. Abiy Ahmed is expected to strengthen the Fund’s operations and support its mission of providing explicit depositor protection in the Ethiopian banking system.
Source: The National Bank of Ethiopia
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