Welcome to
Ethiopian Deposit Insurance Fund
FINANCIAL STABILITY IN ETHIOPIA 100,000 Birr Coverage Limit
Ethiopian Deposit Insurance Fund
Ethiopian Deposit Insurance Fund (EDIF) is one element of financial safety net. EDIF is an institution having its own juridical personality that is established based on Council of Ministers Regulation No. 482/2021; and it commenced operation offcially in April 2023 by fulfilling necessary preconditions. The role of the Fund is to contribute to financial system stability by protecting depositors in the event of a deposit taking financial institution (i.e. a commercial bank or a microfinance institution) fails to discharge its obligation to their depositors.
Objective
PUBLIC
POLICY
OBJECTIVES
OF
EDIF
protect small deposit holders who have difficulty in getting and analyzing the financial condition of commercial banks and microfinance institutions
contribute to the stability of the financial system by preventing depositors’ panic and bank-run
reduce government’s financial obligation and protect tax-payers money in case of failure of a deposit taking financial institution
News
EDIF Launches New Website to Boost Public Awareness
It gives me great pleasure and honour to extend a warm greeting to you on our website, which serves as one of our digital public communication channel for the dissemination of public information. This website helps us accomplish our goals and fulfil our obligations by enhancing and supporting our operations.
EDIF Holds Awareness & Dialogue Conference
On March 22, 2024, the Ethiopian Deposit Insurance Fund (EDIF) conducted an awareness and dialogue conference at the Skylight Hotel, marking a significant step in its journey to bolster the financial system’s stability. The event was graced by Ato Solomon Desta, the Vice Governor of the National Bank of Ethiopia
EDIF Conducted Stakeholders’ Consultation Meeting
On July 5, 2024, in Addis Ababa, at NBE-Building-3 Meeting Hall, the Ethiopian Deposit Insurance Fund (EDIF) had a stakeholders’ consultation meeting for the 2023–2024 fiscal year. Attending the meeting are representatives from member financial institutions, such as commercial banks and microfinance. A representative from the National Bank of Ethiopia
Banks
Microfinance
Institutions
FAQ
General Questions
EDIF is established to provide protection or insurance to depositors of commercial banks and microfinance institutions operation in the country in case a bank or a microfinance institution fails and become insolvent to pay back depositors money. Accordingly, EDIF discourages deposit run in case of a failure of a bank and microfinance institution and contributes to financial stability of the country.
Membership is compulsory for all commercial banks and micro-finance institutions operating in Ethiopia and licensed by National Bank of Ethiopia. These institutions must comply with the Fund’s requirements, including paying the prescribed premiums.
EDIF provides a deposit coverage up to Birr 100, 000 in case a commercial banks or microfinance institution fails or liquidates.
EDIF provides insurance coverage for the following types of deposits.
- Current or demand/checking accounts;
- saving accounts;
- Time deposits;
- Joint accounts;
- Trust accounts;
- foreign currency deposits (translated to local currency);
- Voluntary saving accounts; and
- Compulsory saving accounts.
EDIF doesn’t provide insurance coverage for the following deposits.
- Deposits of insurance companies maintained within the bank;
- Deposits of capital lease companies maintained within the bank;
- Deposits of other commercial banks maintained within the bank;
- Deposits of microfinance institutions maintained within the bank;
- Deposits of the Federal Government maintained within the bank;
- Deposits of the Federal Government Agencies/Authorities/Institutes … maintained within the bank;
- Deposits of external auditors (including his partner’s) of the bank;
- Deposits frozen by the court decision;
- Deposits of a borrower of the bank that serves as a collateral for the loans granted to the borrower itself;
- Deposits of influential shareholders, board of directors, chief executive officer, and senior executive officers of the bank;
- Deposits of the spouses of the influential shareholders, board of directors, chief executive officer, and senior executive officers of the bank;
- Deposits of individuals having fist degree consanguinity relationship with the influential shareholders, board of directors, chief executive officer, and senior executive officers of the bank; and
- Deposits of a legal entity in which the influential shareholders, board of directors, chief executive officer, and senior executive officers of the bank are having more than 10% voting right.
EDIF is accountable to National Bank of Ethiopia and periodically reports its achievements or performance to the Parliament.
EDIF is collecting significant amount of deposit insurance premium from all commercial banks and microfinance institutions, and this funds will be used for deposit reimbursement in case of the failure of the institutions. EDIF is also investing these funds in Government Treasury Bills to generate more income and to strengthen its financial position. On top of this, EDIF is developing a deposit payout system that enables to timely effect deposit reimbursement to each and every depositors of a failed bank or microfinance institutions.
EDIF effects deposit payout to insured depositors through a pay agent bank that have wide branch network all over Ethiopia. The bank should have a strong financial position and administrative capacity.
In case of the failure of a bank or microfinance institution, EDIF should be ready to start deposit payout within 28 days after the failure of the bank or microfinance, and continuous to effect the deposit payout process for five years.
Yes. All commercial banks and microfinance institutions that are licensed by National Bank of Ethiopia are the member of EDIF, and their customers’ deposits are covered under the deposit insurance.