The Deposit Insurance System is a system establish by the banking Law to provide protection to depositors against losses caused by a credit institution’s inability to pay deposits when due. This protection is provided by making the deposits available to depositors up to the guaranteed maximum coverage amount prescribed in the Bank Al-Maghrib’s Circulars.
Commercial and Participative banks are member institutions of the Deposit Insurance System. The Deposit guarantee system is regulated by the banking law and the Bank Al-maghrib’s circulars and Decisions.
The Deposit Insurance System is an integral component of financial safety net that underpins the stability of the entire banking system.
The Deposit Insurance System is funded by member institutions which pay flat-rate premiums. Currently, the annual premium is assessed at 0.20% of the monthly average of total eligible deposit. The collected funds will be used to compensate the insured depositors upon the failure of a member bank or to provide financial assistance to member institutions in difficulties. The Deposit Insurance System does not receive government financial supports or subsidies.
The main features of deposit insurance system in Morocco
The Membership in the Deposit Insurance System is compulsory for all institutions licensed to carry on deposit taking business. The Deposit Insurance System covers deposits of natural and legal persons, both resident and non-resident. All types of eligible deposits of account holders are protected, including savings accounts, sight deposits, current accounts and time deposits. All exclusions from the system are prescribed in Article 131 of the banking law, in accordance with the common practices in the world.
Since its establishment in 1996, the Deposit Insurance System has not intervened.
The Deposit Insurance System is managed by the SGFG, an entity, created and regulated with the banking Law, and Bank-Al Maghrib circulars and decision. The task of SGFG is to manage the Deposit Insurance Fund with the main mandate to compensate depositors in the case of closure of a bank.
In case of a bank failure, the Deposit Insurance System guarantees the reimbursement of up to maximum amount per depositor, regardless of the number and type of deposits held in such a bank and within the specified time period.
See also the Core Principles for Effective Deposit Insurance System
The Core Principles for Effective Deposit Insurance System were published in 2014 by the International Association of Deposit Insurers (IADI) and the Basel Committee on Banking Supervision.
The Core Principles for Effective Deposit Insurance System is a voluntary scheme to achieve efficiency on deposit insurance: they have been designed to suit a wide range of country circumstances, settings and structures.