Must banks register with CODI to become members?

No. All registered banks are automatically members of CODI. A bank is considered a member of CODI from the date it is licensed or registered under the relevant financial sector law that allows it to hold covered deposits.

Which banks are members of CODI?

All local banks, including commercial banks, mutual banks, co-operative banks and branches of foreign-owned banks registered under the Banks Act 94 of 1990 (Banks Act), Mutual Banks Act 124 of 1993 (Mutual Banks Act) and the Co-operative Banks Act 40 of 2007 (CBA), are automatically and by law members of CODI. This encompasses banks within South Africa’s borders that are regulated and supervised by the PA as the primary or host supervisor.

Will co-operative financial institutions be members of CODI?

Currently, co-operative financial institutions (CFIs) are not included as members of CODI. However, CODI plans to assess the feasibility of integrating CFIs in the deposit insurance framework in the future.

Why is the maximum coverage level R100 000 per qualifying depositor per bank?

Setting the coverage level at R100 000 ensures that CODI can fully protect nearly 95% of depositors in South Africa with balances below R100 000 in accounts in qualifying products. CODI’s mandate is to protect the less sophisticated customers who trust banks to keep their money safe. This approach aligns with the core principles of the International Association of Deposit Insurers (IADI), the global standard-setter for deposit insurance schemes, which recommends that the coverage level should ensure that most depositors across banks are fully covered, while a substantial portion of the value of deposits remains partially covered.

What is the difference between the premiums and the levies that banks must pay to CODI? Are banks required to pay both premiums and levies to CODI?

Banks are obligated to pay both an annual levy and monthly premiums to CODI. The annual levy covers CODI’s operational expenses. The premiums are collected to fund the DIF, which protects covered depositors. Any surplus from the levy income is transferred to the DIF at the end of CODI’s financial year.

Will banks’ financial contributions be limited to prevent excessive payments to CODI?

Financial contributions are calculated based on a percentage of a bank’s total covered deposits as specified by law. If a bank fails, CODI will use the DIF to ensure that qualifying depositors with positive balances in accounts in qualifying products will have reasonable access to their covered deposits.

If a bank does not have any covered deposit balances, how will it affect its financial contributions to CODI?

A bank without any covered deposits is still a member of CODI and required to pay the minimum annual levy of R1 000 as stipulated in the Financial Sector and Deposit Insurance Levies Act 11 of 2022. However, in terms of the Financial Sector and Deposit Insurance Levies (Administration) and Deposit Insurance Premiums Act 12 of 2022, such a bank is exempt from paying monthly premiums to CODI.

The Fund Liquidity Tier Standard mandates that a bank must enter into a contractual agreement with CODI for the fund liquidity tier, even if it does not have any covered deposit balances. The bank’s CEO and CFO are required to submit a monthly Declaration A1 form to CODI to confirm the absence of covered deposits for a specific reporting date.

Is CODI independent of the SARB?

CODI operates as an independent subsidiary of the SARB, with its own Board and management team. Although it is part of the SARB Group and has certain governance and reporting obligations to the SARB, CODI’s Board oversees its operations independently.

Why can’t CODI use the banks’ returns submitted to the PA?

Banks already provide an aggregated balance sheet, income statement and risk-related data to the PA. CODI requires single customer view (SCV) information to perform its role of protecting the covered depositors of a bank in resolution.

CODI mandates that banks include depositors’ personal information in their quarterly deposit insurance submissions. Has CODI addressed the compliance requirements of the Protectional for Personal Information Act 4 of 2013 (POPIA)?

Yes. CODI is collaborating with the SARB’s POPIA team to ensure adherence to the legislation’s requirements.

How often will banks need to submit deposit insurance data to CODI?

Banks are required to submit their total qualifying deposits and total covered deposits to CODI monthly. Starting from 1 October 2025, banks must provide these aggregated balances every month as well as include them with supporting SCV calculations on a quarterly basis.

If a local branch of a foreign bank is part of a foreign deposit insurance scheme, will it still need to join CODI?

According to the FSR Act, all banks are required to join CODI. Accordingly, no exemptions are allowed. However, future amendments to the FSR Act may be considered to address possible exemptions.

Can banks address client queries using the information provided on CODI’s webpage and other published documents, or must they always refer clients directly to the website or CODI?

Banks are permitted to use information from CODI’s webpage and the deposit insurance materials distributed to them to answer client inquiries. However, some information from the discussion papers may be outdated. If clients require more detailed information than what is available on the webpage or provided materials, banks should direct the query to CODI at CODI@resbank.co.za.

How can banks obtain deposit insurance information to distribute to their depositors?

Banks should request the digital deposit insurance information from CODI by emailing CODI@resbank.co.za.

How often must banks train their customer-facing staff?

Banks are required to train their customer-facing staff annually, using the training materials provided by CODI. They must refer to the Final guidelines on the implementation of banks’ public awareness obligations for additional guidance.

Should banks expect to be audited on an annual/regular basis?

The Deposit Insurance Regulations of 2024 require CODI to perform a validation or verification of a bank’s SCV calculations.  CODI may request the PA to direct a bank to obtain and provide the PA and CODI with a report by a public accountant relating to an audit of a bank’s compliance with the Fund Liquidity Tier Standard. Moreover, CODI may request the SARB to appoint external auditors to validate/verify a bank’s SCV calculations.