East African countries have resolved to take action to protect depositors of failed banks.
The governments are working on increasing compensation for victims of collapsed banks as part of efforts to boost depositor confidence in the banking industry, which has had incidences of bank failures in the past five years.
Regional member states are working towards harmonising rules and regulations for dealing with troubled banks as part of measures to enhance the stability of the region’s banking sector.
In 2016, the EAC member states through the Monetary Affairs Committee resolved to jointly put in place measures to deal with troubled banks.
Recently, Kenya’s Deposit Insurance Corporation (KDIC) increased the insurance coverage for depositors to Ksh500,000 ($5,000) from Ksh100,000 ($1000), which had been in force for three decades.
The increase came after the KDIC jointly with the US-Treasury carried out a study in 2016 on the possibility of reviewing the insured deposits to boost confidence in the banking sector