BDSF Law

Establishment of the Fund, Its Objectives and Powers

A Fund to be known as the "Bank Deposit Security Fund" shall be established as an independent body with a corporate legal identity.

The Fund shall have its head office in Khartoum and may establish branches or agencies in other states of Sudan.

Objectives of the Fund

The Fund shall have the following objectives:

• To guarantee deposits in guaranteed banks in accordance with the provisions of Article (19).
• To protect the rights of depositors, maintain the stability and soundness of guaranteed banks, and strengthen confidence in them.
• To remedy losses when they occur through cooperation and mutual support among the monetary authorities, banks, and the depositors themselves.
• To establish and manage the following Takaful Funds:
  • First: Takaful Fund for the guarantee of current and savings deposits, with contributions made by banks, the Government, and the Central Bank only.
  • Second: Takaful Fund for the guarantee of investment deposits, with contributions made by investment deposit holders only.
  • Third: Takaful Fund for remedying cases of final financial insolvency, with contributions made by the banks, the Government, and the Central Bank only.

Powers of the Fund

For the purpose of achieving the objectives set out in Article (5), the Fund shall have the following powers:

• To register and cancel the registration of guaranteed banks in accordance with the provisions of this Act.
• To obtain financing, whether secured or unsecured, in accordance with Islamic financing modes.
• To conclude contracts with any entity or person inside or outside Sudan in accordance with the regulations.
• To invest surplus or unutilized funds in accordance with the requirements of financial soundness.
• To request the Central Bank to provide the data and information necessary for studying the financial positions of guaranteed banks.
• To request the Central Bank to conduct a special audit of any guaranteed bank in accordance with Article 28(1) of the Banking Business Regulation Act of 1991.
• To request the Central Bank to inspect the accounting records of any guaranteed bank.
• To exercise any other powers necessary or required to achieve its objectives.

Management of the Fund

Establishment, Composition, and Responsibilities of the Board

A Board shall be established for the management of the Fund. The Board shall perform its duties and exercise the powers necessary to enable it to achieve the objectives of the Fund. The Board shall be composed as follows:

• The Governor or Deputy Governor of the Central Bank – Chairperson.
• The General Manager – Member and Secretary of the Board.
• The Undersecretary of the Ministry of Finance.
• The Director General of the General Administration for Supervision of Banks and Financial Institutions at the Central Bank.
• Three members possessing competence and knowledge in banking activities, nominated by the Sudanese Banks Union and approved by the Central Bank. In the case of nominations from branches of foreign banks operating in Sudan, selection shall be based on the highest position occupied by a Sudanese national within the branch.

The term of membership for members referred to in paragraph (2)(e) shall be two years, renewable for one additional term only.

Obligations of the Chairperson and Members of the Board

The Chairperson or any member of the Board shall not be placed in a position where his or her personal interest conflicts with the interest of the Fund. In particular, they shall be prohibited from:

• Engaging in any activity similar to that of the Fund and involving direct or indirect competition, whether personally or through another person.
• Borrowing or obtaining any financing guaranteed by the Fund.
• If the Chairperson or any member, or any member of his or her family, intends to enter directly or indirectly into any transaction with the Fund that results in a personal benefit, he or she must disclose such interest to the Board and shall not participate in the discussions or decisions related to that matter.

Removal from Office or Vacancy of Membership

A member shall be removed from office in the following cases:

• Medical incapacity.
• Absence from three consecutive meetings without permission or an acceptable excuse.
• Violation of the provisions of Article (8).
• Conviction of an offence involving dishonesty or moral turpitude.
• If the member represents a particular entity and his or her representation of that entity has ended.

The position of any member shall become vacant in the following cases:

• Issuance of a decision for his or her removal.
• Acceptance of his or her resignation.
• Death.

Powers and Responsibilities of the Board

The Board shall have the following powers and responsibilities:

• To formulate general policies and plans necessary to achieve the objectives of the Fund and follow up their implementation.
• To approve the Fund’s projects, plans, and programs and ensure coordination with state institutions.
• To supervise the proper performance and operations of the Fund.
• To consider reports submitted by the General Manager and issue appropriate directives.
• To approve the annual budget, final accounts, and estimated budget.
• To approve the organizational and employment structures and the conditions of service for employees.
• To appoint employees in senior leadership positions, approve their promotions, and hold them accountable.
• To approve payment of the guaranteed amount to depositors in accordance with the provisions of the Act.
• To approve the appointment of consultants and professional advisory firms and determine their remuneration.
• To issue internal regulations governing the procedures of meetings.

The Board may delegate some of its powers to its Chairperson or the General Manager according to such conditions as it deems appropriate.

Meetings of the Board

• The Board shall hold an ordinary meeting at least once every three months.
• Extraordinary meetings may be held whenever necessary.
• The Chairperson shall preside over meetings. In his or her absence, the Board shall choose a Chairperson for the meeting.
• The legal quorum shall be constituted by the attendance of the majority of members.
• Decisions shall be made by a simple majority. In the event of a tie, the Chairperson shall have the casting vote.

Remuneration of Board Members

The Minister, in consultation with the Governor, shall determine the remuneration of the members of the Board.

Appointment of the General Manager and His/Her Responsibilities

The General Manager shall be appointed by a decision of the Minister after consultation with the Governor for a period of five years, renewable. The General Manager shall be:

• A person with sufficient qualifications and experience.
• A person known for competence and full knowledge of banking activities.
• A person known for honesty and integrity.

The General Manager shall administer the Fund and manage its affairs and shall be responsible for:

• Registering and cancelling the registration of guaranteed banks.
• Preparing detailed programs and plans.
• Managing the Fund and organizing its daily activities.
• Preparing the annual budget and final accounts.
• Implementing the policies of the Board.
• Representing the Fund before various entities.
• Preparing the organizational structure.
• Signing approved agreements.
• Establishing supporting committees.
• Performing any other duties delegated by the Board.

The General Manager may delegate some of his or her powers in accordance with appropriate regulations.

Confidentiality

The Chairperson, members of the Board, the General Manager, and all employees of the Fund shall observe complete confidentiality in all matters related to the Fund.

Membership of Banks, Registration with the Fund, Determination of the Maximum Guaranteed Deposit Limit, and the Fund’s Obligations Toward Depositors

Membership and Registration of Banks

• Membership of banks in the Fund shall be mandatory upon the issuance of this Act.
• The Fund shall register the banks referred to in paragraph (1), as well as any new bank after obtaining a license to conduct banking business in Sudan following the enactment of this Act.

Notification of Registration

• Upon registering any bank, the Fund shall send a written notification to that bank within thirty days from the date of registration.
• The notification shall include the method by which the annual contribution payable by the bank is calculated, the determination of the bank’s contribution to the capital of the Fund, and the method of payment in accordance with the provisions of this Act and the regulations issued thereunder.

Determination of Deposits Covered by the Guarantee

The Fund shall guarantee the total amount of deposits in local currency except for:

• Deposits pledged as collateral or security for banking operations.
• Deposits of the Chairperson and members of the Board of Directors and General Managers of any guaranteed bank.
• Deposits of shareholders whom the Fund determines to bear responsibility for the unsound financial position of the relevant bank.
• Deposits of the chartered accountants appointed to audit the accounts of the relevant bank.
• Deposits of spouses and minor children of the persons referred to above.
• Any deposits which the Board determines were obtained through unlawful means.
• Any company in which the bank owns the largest number of shares.
• Any other deposits that the Board deems appropriate to exclude.

Maximum Guaranteed Deposit Limit

• The maximum guaranteed limit for current and savings deposits shall be determined in accordance with the regulations issued under the provisions of this Act.
• In the case of investment deposits, the guaranteed limit shall be determined by a decision issued by the Board after consultation with the Governor.
• The Board may, whenever it deems necessary and after consultation with the Governor, increase the maximum guaranteed deposit limit.

The Fund’s Obligations Toward Depositors

• Upon the dissolution or liquidation of any guaranteed bank, the Fund shall pay an amount equal to the guaranteed limit to the depositor, provided that the amount paid shall not exceed the total amount of his or her deposits as of the date of the dissolution or liquidation order.
• In the event of a settlement, restructuring, or merger arrangement whereby the depositor receives an amount less than the guaranteed limit, the Fund shall pay the difference in accordance with the provisions of this Act.
• The amount of the deposit shall be determined after deducting any amount legally due to the bank through set-off.

Method of Payment by the Fund upon Liquidation of a Guaranteed Bank

• Upon the dissolution or liquidation of any guaranteed bank, the liquidator shall submit to the Fund within thirty days a detailed list of depositors’ deposits and the amounts subject to set-off.
• The Fund shall pay the amounts due within sixty days from the date of receiving the list.
• The liquidator shall pay the amounts to depositors individually.
• In the case of a merger or acquisition, the concerned bank shall submit a detailed list to the Fund within thirty days from the commencement of the implementation of the arrangement.
• The Fund shall pay the amount due to depositors within sixty days from the date of receiving the list.

Repayment to the Fund

• The liquidator shall repay to the Fund from the recovered amounts an amount not exceeding what the Fund paid for each deposit, in addition to expenses related to the recovery process.
• The guaranteed bank or the transferee bank shall repay the amount due to the Fund in accordance with the provisions of this Act, provided that it does not exceed the amount paid by the Fund in addition to the related expenses.

Financial Provisions

Capital of the Fund

The capital of the Fund shall consist of the following:

• The Government's contribution, paid by the Ministry of Finance, amounting to 25 (twenty-five) million Sudanese Dinars.
• The contribution of the Central Bank amounting to 40 (forty) million Sudanese Dinars.
• The contributions of banks amounting to one million Sudanese Dinars for each bank registered as a member of the Fund, regardless of the size of its deposits, provided that this contribution shall be paid upon notification of the bank’s registration in accordance with the provisions of this Act.

• The contributions mentioned above shall be fully paid.
• The Board may, with the approval of the Minister and the Central Bank, increase the contributions to the capital of the Fund to the extent it deems necessary.

Financial Resources of the Fund

The financial resources of the Fund shall consist of:

• The capital provided for under Article (22).
• The annual contributions provided for under Article (24).
• The returns generated from the investment of the Fund’s resources.
• Any other resources approved by the Board.

Annual Contributions Paid to the Fund

• Guaranteed banks shall pay annually an amount equivalent to two per thousand (0.002) of the average total of their current and savings deposits, and this amount shall be added to the account of the Takaful Fund for the Guarantee of Current and Savings Deposits.
• Guaranteed banks shall pay annually an amount equivalent to two per thousand (0.002) of the average total investment accounts, and this amount shall be added to the account of the Takaful Fund for Remedying Cases of Final Financial Insolvency.
• Investment account holders shall pay annually an amount equivalent to two per thousand (0.002) of the average total of their investment deposits to the Fund, and this amount shall be added to the account of the Takaful Fund for the Guarantee of Investment Deposits.
• The Government and the Central Bank shall each contribute 10% of the total annual contributions mentioned above.
• The contributions shall be calculated at the end of the last month of the calendar year and shall be paid during January of each year.
• The contributions shall be calculated after deducting the statutory reserve held with the Central Bank from the total deposits.
• Each bank shall submit a declaration certified by its external auditor confirming the accuracy of the calculation of the contribution.
• In the event of delay in payment, the Fund shall have the right to request deduction of the outstanding amount from the bank’s account with the Central Bank, together with any additional charge determined by the Fund.
• The Board may, with the approval of the Central Bank, amend the annual contribution rates to the extent it considers necessary.

Fund Budget

The Fund shall have an annual budget and final accounts prepared in accordance with sound accounting principles for preparing financial statements and submitted to the Board for approval.

Maintenance of Accounts, Books, Records, and Deposit of Funds

• The Fund shall maintain proper and complete accounts in accordance with sound accounting principles and keep all related books and records.
• The Fund shall deposit its funds with the Central Bank or any other bank approved by the Central Bank in current or deposit accounts in the manner determined by the Board.

Audit

The Auditor General or any person delegated by him shall audit the accounts of the Fund after the end of each financial year.

Liquidation of the Fund

The Fund shall not be liquidated except pursuant to a law.

Submission of Reports and Information to the Fund

• Every guaranteed bank shall provide the Fund with periodic reports, statements, and any studies or statistics related to the activities of the Fund.
• Every guaranteed bank shall inform the Fund of any anticipated risks that may affect the rights of depositors.
• The Fund shall, upon the request of the Central Bank, provide it with any data or information requested regarding any guaranteed bank as deemed necessary by the Central Bank.
• The Fund may request the Central Bank to provide it with any reports or information available to it relating to any guaranteed bank.
• Notwithstanding any provision to the contrary in any other law, the Fund may, at any time, through the Central Bank, direct any guaranteed bank to provide within a specified period any data or information related to the affairs of that bank for the purpose of achieving the objectives of this Act.

Settlement of Disputes

Notwithstanding the provisions of any other law, the Central Bank shall settle any dispute arising between the Fund and any guaranteed bank concerning its periodic contributions, and the decision of the Central Bank in this regard shall be final and binding.

Non-Refundability of Capital

The paid-up capital and annual contributions shall not be refundable for any reason whatsoever.

Penalties

Without prejudice to any more severe penalty prescribed by any other law, any person who knowingly prepares a false statement, intentionally omits any material information concerning any financial statement, document, information, or data required or prepared under the provisions of this Act, or fails to provide any document, statement, or information that he or she is required to submit or prepare, shall be deemed to have committed an offence and shall, upon conviction, be punished by imprisonment for a term not exceeding three years, or by a fine, or by both penalties.

Power to Issue Regulations

The Board may, with the approval of the Minister, issue the regulations necessary for the implementation of the provisions of this Act.