Rwanda: Parliament approves draft law to protect bank savings
The Parliament of Rwanda approved on Wednesday (7 May) the basis of a new law establishing a guarantee fund for the banking sector.The Parliament of Rwanda approved on Wednesday (7 May) the basis of a new law establishing a guarantee fund for the banking sector.
explanatory note of the draft law states that the fund "aims at effectively contributing to financial stability by maintaining public confidence in the financial system through prompt payment of protected deposits to depositors of a failed contributing bank or contributing micro finance institutions."
Trade and Industry minister François Kanimba said the fund will help the Central Bank get enough money to bail out banks in case they fail to meet their financial obligations, the New Times
The Deposit Guarantee Fund would be managed by the Central Bank along with an advisory committee, and membership would be compulsory for all banks and micro-finance institutions in the country.
The Bill instituting the fund will be examined in standing committees before it is sent back to Parliament for enactment.
Director of Programmes at the Association of Microfinance Institutions in Rwanda (Amir) Peter Rwema said the fund would boost confidence among clients to save more with the MFIs.
The latest FinScope survey reported that 72 percent of the adult population in Rwanda had access to formal and informal financial products in 2012, up from 52 percent in 2008. The population using banks also increased from 14 percent in 2008 to 23 percent in 2012.