Deposit Protection Fund develops online system

The Deposit Protection Fund’s call to the public to update their bank accounts details will enable it store their information in a computerised system. This online system is expected to ease payments to depositors in case a bank is closed.
On December 4, the Deposit Protection Fund (DPF) explained that whoever has more than one account in different banks should update all their account details because when one bank they are in gets closed, DPF will use their other accounts to pay back their money.
The DPF also advises people to update their working mobile phone numbers in their banks because it will also use the mobile numbers to make seamless payments. So, people won’t have to travel from their villages to Kampala to get their payments.
The bank account updates also compel those who have dormant banks to update their details.
In a joint discussion at its head office in Nakasero last week, the chief executive officer of Deposit Protection Fund, Ms Juila Clare Olima Oyet, said no bank is closing. As such, the move aims at making payments easier in the event that financial institutions fail.
“We are developing an online payment system which will capture all the information of depositors in financial institutions who are members of DPF. So, bank account holders must ensure that they update their account information to ease the payment process should a bank close. Those with updated information will get their get payment faster than those without updated information. In the unlikely event of a bank closure, depositors can have seamless access to their money,” she said.
Ms Olima explained that the Deposit Protection Fund’s automated online system will be used to execute payments to depositors’ right from where they are using mobile money payments system. Accounts in other banks will be used as alternative accounts for making payment to the account holders.
While there is currently no deadline to update account information, there will be one with time. Those opening bank accounts now will not need to update their account details.
For almost a year now, commercial banks have been asking people to update their bank accounts. Financial institutions that are members of the DPF have been providing reports to DPF on the updated bank accounts.
Pay Back Depositors
Relating to paying back depositors their money, Ms Olima said although DPF pays up to Shs10 million to depositors when their bank closes, she warned that those who don’t pay back loans they have borrowed from banks will have their money deducted. This is because they will have contributed to the collapse of that financial institution by not paying back the borrowed money.
“If one has Shs10 million in his or her account, and the bank they are in happens to be closed down, when they have say Shs2 million, which they had not paid, instead of getting Shs10 million, they will get Shs8 million. The other Shs2 million caters for the loans they had not paid back.”