Is there a need for banks to register with CODI to become members?

No. All registered banks automatically became members of CODI upon CODI’s establishment. A bank is a member of CODI from the date it is licensed or registered in terms of the relevant financial sector regulation laws that allow it to hold covered deposits.

Which banks are members of CODI?

Membership is automatic and compulsory for all local banks, including commercial banks, mutual banks and co-operative banks as well as branches of foreign-owned banks registered in terms of 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). This definition includes banks operating within the borders of South Africa that are regulated and supervised by the Prudential Authority (PA) as the home or host supervisor.

Will cooperative financial institutions be members of CODI?

Cooperative financial institutions (CFIs) are currently not members of CODI, but CODI will undertake work to determine the feasibility of including CFIs in the deposit insurance framework in future.

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

At the R100 000-coverage level, CODI will provide full protection for almost 95% of the qualifying depositors in South Africa. CODI’s mandate is to protect the less sophisticated customers who place their money in a bank for safekeeping. These observations are in line with the core principles of the International Association of Deposit Insurers (IADI), the global standard-setter for deposit insurance schemes, which states that the level and scope of coverage must be set so that most depositors across banks are fully covered while leaving a substantial proportion of the value of deposits partially covered.

Will a cap be applied to banks’ financial contributions to CODI to ensure that banks do not pay excessive amounts to CODI?

There is no cap on banks’ financial contributions to CODI. Banks' contributions are based on their total covered deposits (i.e. the total amount for which the banks’ qualifying depositors are protected by CODI). Should a bank fail, the Deposit Insurance Fund (DIF) under CODI’s management will be used to protect the covered deposits.

What is the difference between the premiums and the levies banks must pay to CODI? Must banks pay both premiums and levies to CODI?

Banks must pay both an annual levy and monthly premiums to CODI. The annual levy is to contribute to CODI’s operational costs. The premiums are to fund the DIF to be used to protect covered depositors. Any surplus levies must be transferred to the DIF annually.

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

A bank with no total covered deposits will still be a member of CODI and liable for the minimum annual levy of R1 000 as prescribed 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, a bank will not pay the monthly premiums to CODI for as long as it has no covered deposits.

The Fund Liquidity Tier Standard specifies that a bank must enter into a contractual agreement with CODI for the fund liquidity tier, even if it does not have a covered deposit balance. The chief executive officer (CEO) and chief financial officer (CFO) of such a bank must submit Declaration A1 forms to CODI to confirm that the bank did not have covered deposits for a particular reporting date.

Is CODI independent of the South African Reserve Bank (SARB)?

CODI is an independent subsidiary of the SARB with its own Board of Directors (Board) and management team. Since CODI is part of the broader SARB Group, it has some governance and reporting obligations to the SARB, but its Board is responsible for overseeing CODI’s operations.

Why could CODI not use the banks’ returns submitted to the PA?

Banks currently submit aggregated balances on balance sheet, income statement and risk-related items to the PA. CODI requires single customer view information to enable it to fulfil its mandated function of protecting the covered depositors of a bank in resolution.

CODI requires banks to submit depositors’ personal information in their quarterly deposit insurance submissions. Has CODI considered the compliance requirements of the Protectional for Personal Information Act 4 of 2013 (POPIA)?

Yes. CODI is working with the SARB’s POPIA team to ensure that it complies with the requirements of the legislation.

Will banks be required to provide depositor information in a single customer view (SCV) format?

Banks must submit their total qualifying deposits and total covered deposits to CODI on a monthly basis, using SCV calculations based on month-end balances. CODI has, under regulation 38(3) of the Deposit Insurance Regulations of 2024 (Regulations), exempted all banks from regulation 28(2) of the Regulations, which requires banks to submit SCV calculations with their total qualifying deposits and total covered deposits to CODI on a quarterly basis or at a frequency specified by CODI.

The aforementioned exemption will be granted for a period of 18 months, from 
1 April 2024 until 30 September 2025. During the exemption period, banks will have to calculate their total qualifying deposits and total covered deposits using the guidelines for SCV calculations in Chapter VII of the Regulations and will have to submit their total qualifying deposits and total covered deposits to CODI monthly, using month-end balances, as required by regulation 28(1).

In terms of regulations 29(1) and 29(2) of the Regulations, CODI may still require ad hoc submissions from banks, which include the submission of their SCV calculations (with depositors’ information) with their total qualifying deposits and total covered deposits as at a date specified by CODI.

CODI will agree with banks on the format and the mechanism of the ad hoc submissions when it requires a bank to provide an ad hoc submission.

Will banks report month-end or average balances to CODI?

Month-end balances. A deposit insurer needs updated balances as at a point in time. The monthly deposit insurance submissions will be based on month-end balances. When CODI requests ad hoc submissions, it will specify the date on which the bank must base the submission.

How frequently will banks do deposit insurance submissions to CODI?

Banks will submit their total qualifying deposits and total covered deposits to CODI monthly. From 1 October 2025, banks will be required to submit these aggregated balances monthly and the balances with the supporting SCV calculations on a quarterly basis to CODI.

When a local branch of a foreign bank is a member of a foreign deposit insurance scheme, will it still be a member of CODI?

The Financial Sector Regulation Act 9 of 2017, as amended (FSR Act), does not allow for the exemption of any member banks from being a member of CODI. Future amendments to the FSR Act to consider such exemptions may be considered.

Is CODI comfortable that banks answer queries from clients using the information provided on CODI’s webpage and other documentation published by CODI or do banks have to refer all client queries to the website and/or CODI directly?

Banks can use the information on CODI’s webpage as well as the deposit insurance material distributed to banks to respond to queries. Some of the information in the discussion papers may not be valid anymore. If the client wants more detailed information than what has been provided on the webpage or the deposit insurance material distributed to banks, banks may direct the query to CODI at CODI@resbank.co.za.

Is the reporting discussion paper issued in 2021 a stable document for banks’ internal teams to use to determine their system requirements?

Some of the information in the discussion paper may not be valid anymore. It can be used as a basis for system preparations, but it is important for banks to note that the final reporting fields, submission methods and data formats for CODI’s initial reporting requirements applicable from 2024 are contained in the Member Bank Data Handbook and Government Gazette.

Has a decision been made on the payment method for deposit insurance premiums?

CODI has provided banks with an onboarding document with the payment method details for financial contributions and the fund liquidity tier contribution.

How can banks access deposit insurance information for distribution to depositors?

Banks must request the digital deposit insurance information from CODI at 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 material provided by CODI. Banks must consult the Final guidelines on the implementation of banks’ public awareness obligations for further guidance.

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

CODI may, through the PA, require an external audit of a bank’s compliance to the Fund Liquidity Tier Standard. In addition, CODI’s Regulations contain the specific internal audit reporting requirements for banks.