Deposit Guarantee Authority launched

The Namibia Deposit Guarantee Authority (NDGA) was officially last week by the chairperson of its board of directors and deputy governor of the Bank of Namibia (BoN), Ebson Uanguta.The NDGA is a deposit guarantee scheme established by the Namibia Deposit Guarantee Act, Act No. 16 of 2018 to provide protection to depositors against the loss of their deposits by providing compensation in the event of a commercial bank failure.The newly launched entity is an independent body but is administratively managed within the existing structures of BoN.Uanguta said the provision of a financial safety net is critical in any economy.He added that BoN will continue to provide administrative and budgetary support to NDGA for the next couple of years until the entity is able to sustain itself.“There is a bilateral cooperation between the NDGA and BoN, so our support, both budgetary and administrative will be channelled through that process,” said Uanguta.SIGNIFICANT MILESTONEIn a statement read on his behalf, finance minister Iipumbu Shiimi said the establishment of NDGA is a significant milestone in Namibia’s quest to modernise its financial sector.“While the Bank of Namibia will continue implementing its regulatory framework to ensure that banking institutions are adequately capitalised and well-managed, the NDGA complements this by safeguarding the depositors and maintaining public confidence in the financial system,” he said.The primary mandate of the NDGA is to ensure that in an unlikely event of bank failure, small depositors are compensated in a timely and transparent manner, according to Shiimi.Orderly compensations and crisis management will eliminate unnecessary panic and restore confidence in the financial system, he added.The deposit insurance is not a substitute for effective regulations and supervision by banks, Shiimi said, stating that BoN must remain committed to spotting problems and taking prompt and pre-emptive corrective measures.The year 2020 marked the first full year of operationalisation of the NDGA, thus its first annual financial report was also launched on Thursday. - Nampa

Deposit Guarantee Authority launched

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