FUND TO PROTECT SMALL DEPOSITORS’ SAVINGS
Senegal’s Financial Regulator Launches Deposit Guarantee Scheme
Dakar, Senegal - In a move aimed at shielding small depositors from the risks associated with bank failures, the West African Economic and Monetary Union (WAEMU) has introduced a fund to guarantee deposits in case of suspension of payments by credit institutions or Decentralized Financial Systems (SFDs).
Key Features
- Deposit guarantees for clients of credit institutions and SFDs licensed in WAEMU
- Maximum compensation limits:
- XOF 1,400,000 per depositor for deposits held in member credit institution books
- XOF 300,000 per depositor for deposits held in member SFD books
The fund will be financed through contributions from member institutions, investment income, donations, grants, and other compatible resources.
BANK RESOLUTION MECHANISMS
Senegal’s banking regulator, the Commission Bancaire, has outlined several scenarios to address bank failures:
Scenarios
- Provisional administration of a credit institution
- Liquidation of a credit institution
- Warning or injunction to take remedial measures
The regulator may also request shareholders and members-policyholders of a troubled credit institution to contribute to its recovery.
RECENT TRENDS IN BANK REGULATION
Senegal is currently undergoing a major reform of its banking regulations, aimed at creating a clearer legal framework for the sector. Key developments include:
Recent Developments
- Revisions to the Uniform Law regulating banking in WAEMU
- Introduction of new laws on anti-money laundering and combating the financing of terrorism
- Draft Banking Law expected to come into force
CYBER THREAT
The cyber threat is considered one of the biggest risks facing Senegal’s financial sector. The country’s banks are increasingly vulnerable to cyber attacks, which could result in significant financial losses.
Response
In response, the authorities are urging banking institutions to prioritize cybersecurity measures to protect against these threats.