BANKING INDUSTRY: INPUT SOUGHT ON DRAFT CODI FUND STRENGTHENING STRATEGY

The South African Reserve Bank (SARB) has published and called for input on a draft strategy for reducing the Corporation for Deposit Insurance’s (CODI’s) dependency on loan funding. The deadline for comment is 24 October 2025.

Including implementation timelines for a phased increase in deposit insurance premiums, the SARB’s proposals are underpinned by the need to:

  • build a ‘resilient and self-sustaining’ deposit insurance fund
  • ‘enhance financial stability’
  • ‘reduce systemic risk’, and
  • lower the … SARB’s guarantee exposure’.

This is noting that, as things now stand:

  • ‘the … (fund) is primarily composed of liquidity tier contributions from banks, which are structured as loans’
  • the CODI ‘pays interest on these contributions at the repurchase … rate but earns no margin’, and that
  • this ‘limits the (fund’s) growth and increases reliance on bank loans.

Please click the link below for more information:

Published by SA Legal Academy Policy Watch

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