Deposit Insurance Scheme increases coverage

Deposit Insurance Scheme increases coverage to S$50,000

More financial protection for individuals and small businesses - under new deposit insurance legislation which kicked in this month to increase bank depositors' coverage.

They will now be able to get back up to S$50,000 in the event of a bank failure.

This, is up from the previous coverage of S$20,000 offered by the Singapore Deposit Insurance Corporation (SDIC).

The changes will ensure that around 91 per cent of depositors will receive coverage will receive coverage. Previously, only 83 per cent were covered by the scheme.

Besides individual depositors, businesses, partner agencies, societies and associations will also be protected.

Small and medium enterprises are likely to benefit the most.

The Monetary Authority of Singapore has also started a framework to hand over the management of the Policy Owners' Protection Scheme (PPF Scheme) to SDIC.

In the event a insurance company under the scheme fails, policy owners will be given 100 per cent protection for their guaranteed benefits with a cap of S$500,000.

Ooi Sin Teik, the CEO of SDIC, said: "They (depositors and policy holders) should have greater peace of mind, should any institution fail, then this is a safety net."

The SDIC administers the Deposit Insurance Scheme in Singapore (DI Scheme) and Policy Owners' Protection Scheme (PPF Scheme).

SDIC is a company limited by guarantee under the Companies Act The board of directors is accountable to the Minister in charge of the Monetary Authority of Singapore.

The main functions of SDIC under the DI Scheme are to collect premium contributions from DI Scheme members, manage the Deposit Insurance Fund, compensate insured depositors and educate the public on the DI Scheme.

~News courtesy of Channel Newsasia~