SARB Invites Comment on Draft CODI Fund Strengthening Strategy

Posted 22 September 2025 Written by Acts Online
Category Financial Sector

Brought to you by SA Legal Academy: The South African Reserve Bank (SARB) has published a draft strategy for reducing the Corporation for Deposit Insurance’s (CODI) dependency on loan funding, proposing a phased increase in deposit insurance premiums.

In terms of the Financial Sector Regulation Act, No. 9 of 2017, the SARB has issued a call for input on the draft strategy to strengthen the Deposit Insurance Fund (DIF). The primary objective of the proposal is to ensure the long-term financial sustainability of CODI by transitioning from a loan-dependent model to a pre-funded model supported by member contributions.

The draft strategy outlines implementation timelines for a phased increase in deposit insurance premiums. These premiums are levied on member banks to build the DIF, which is intended to protect covered depositors in the event of a bank failure. The SARB indicates that the strengthening of the fund is necessary to meet international standards for effective deposit insurance systems and to reduce the potential burden on the fiscus during financial crises.

Stakeholders and interested parties are invited to submit written comments on the draft strategy. The deadline for submissions is 24 October 2025.

What this means for you, your business, or your clients

  • For yourself: No direct individual obligations; impact is channelled through institutional compliance and treasury functions within the banking sector.
  • For your business: Registered banks and financial institutions must review the proposed premium increase timelines to incorporate adjusted deposit insurance costs into their long-term capital and liquidity planning.
  • For your clients: Banking clients may see adjustments in fee structures or interest rates as institutions pass through the increased costs of deposit insurance premiums required to meet the new fund strengthening targets.

Originally published at https://legalacademy.co.za/news/read/banking-industry-input-sought-on-draft-codi-fund-strengthening-strategy

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