Deposit Insurance Corporation

Company:
Deposit Insurance Corporation
Address:
Frederick Street
Town:
Nassau
Island:
Nassau / Paradise Island, Bahamas
Area:
DownTown
Phone
242-302-2600
Website:
http://www.dic.bs/about.php

Business Location
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Description

The Bahamasí Deposit Insurance Corporation (DIC) is a public corporation, established under the Protection of Depositors Act, 1999 (the Act). The DIC insures eligible deposits you make with our member institutions in case of their failure.
Pursuant to section 4 of the Act, which came into effect from 10th November 1999, membership in the Deposit Insurance Fund (the Fund) is compulsory for every licensed bank with Bahamian dollar deposits.
The DIC, which is financed by annual premiums levied on member institutions, has the power to:
levy, on the advice of The Central Bank of The Bahamas (the Bank), authorized contributions and premia on member institutions.
arrange for restructuring of a failed member, whether by merger with a financially sound member or otherwise; and accumulate, manage and invest surplus funds of the DIC.

What is Deposit Insurance and Why is it Important?


The Central Bank of The Bahamas, as supervisor and regulator of the banking system has, as a key objective, the stability of the financial system. In pursuit of this objective, the Central Bank requires banks to have sound risk management and internal controls, and carries out regular reviews of these arrangements.

However, the Central Bank does not guarantee the soundness of individual banks; and, although banks in The Bahamas do not often fail, like any other business, it is possible. Therefore, a deposit insurance scheme has been devised to minimize or eliminate the risk of loss of savings of small Bahamian depositors in the event a bank fails, and to arrange for the expeditious handling of bank failures. Knowing that their deposits are protected, depositors should be less inclined to overreact to any rumors and withdraw their deposits from a bank, which could create a bank run across the system. This safety net mechanism, therefore, promotes confidence and helps to achieve the overall financial stability objective of the Central Bank.

Deposit insurance payouts are made to insured depositors only when a member institution has been closed as a result of action taken by the Central Bank.

Deposit Insurance Corporation

The DIC is one of the twenty-five (25) founding members of the International Association of the Deposit Insurers (IADI). It is committed to the implementation of international best practices and standards and, as provided for under section 3 of the Act, is the Manager of the Fund.

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