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BDSF Reimbursement Experience
Since its establishment in 1996 the BDSF has handled two liquidation cases namely Nema Bank (1999) and El Safa Bank (2000). According to the BDSF law the insolvent bank is defined as any bank prohibited from practicing banking activities, or which all of its deposit obligations are transferred to another bank, or to which a liquidator is appointed according to a voluntary liquidation decision. Also according to Article 19 (1) of the BDSF law : in case of liquidation of any member bank, the BDSF should reimburse depositors an amount not more than the maximum coverage limit as specified in article 19. The amounts paid to a depositor must not exceed the amount held at bank on the date of liquidation.
Below is a summary of the liquidation process in the two cases
Reimbursement of Depositors of Nema Investment and Development Bank :-
On the 15th of October 1999 the Governor of the Central Bank of Sudan issued the decision no.12/99 whereby Nema Investment and development bank was closed out and an official liquidator was appointed. The liquidator submitted to the BDSF a list of household depositors ( current and saving deposits) with amount of deposits owned by name and a another list of investment deposit holders containing the amount of deposits. These lists were subjected to careful investigation and scrutiny by the Fund to determine the amounts to be reimbursed for each depositor according to the Law and the reimbursement regulation.
The compensation was carried out as follows:
Compensation of Current and Savings Depositors
The total number of household deposit accounts was 2,478 accounts, with a total amount of SD 194 million.
According to the Bank Deposit Security Fund (BDSF) Law of 1996 and the reimbursement regulations, the Fund paid an amount of SD 47,605,266.32 to the official liquidator to fulfill its obligations towards depositors.
The total number of depositors who were entitled to full coverage was 2,053 depositors, representing 82.8% of the total number of depositors (2,478 depositors). Meanwhile, 257 depositors were entitled to partial compensation according to the maximum coverage limit of SD 10,000, representing 10.4% of the total number of depositors.
Therefore, the total number of household depositors who received compensation reached 2,310 depositors, representing 93.2% of all depositors.
The number of current account holders who were not entitled to compensation was 168 depositors, including:
- 19 governmental institutions.
- 145 depositors with outstanding loans.
- 4 members of the Board.
According to the BDSF Law, these categories were not eligible for compensation.
Compensation of Investment Deposit Holders
The total number of investment deposit accounts was 35 depositors, with a total amount of SD 545 million. Among them, five governmental institutions held deposits amounting to SD 530.2 million, in addition to one board member who held a deposit amounting to SD 1.2 million.
Therefore, deposits amounting to SD 531.4 million, representing 97.5% of the total investment deposits, were not entitled to compensation as they belonged to governmental institutions and a board member.
A total of 29 depositors, with combined deposits amounting to SD 13.6 million, were compensated.
Among them:
- 16 depositors received compensation according to the maximum coverage limit of SD 25,000.
- 13 depositors were fully compensated as their deposits were within the maximum coverage limit.
As such, the total amount paid out to households and investment depositors was 48.2 million Sudanese Dinars as shown below:
| Item | Amount | No of reimbursed | Percentage |
|---|---|---|---|
| Demand and savings deposits | 47,606 | 2,310 | 93.4% |
| Investment deposits | 550 | 29 | 82.9% |
| Total | 48,155 | 2,339 | - |
Reimbursement of depositors of El Safa Investment & Credit Bank (2000):-
According to the decision of the Governor of the Central Bank of Sudan no 5/2000 dated 20 of January 2000, El Safa Investment & Credit Bank was officially liquidated and a liquidator was appointed. The liquidator submitted to the Fund a list of household and investment depositors. Then, the accounts were investigated and scrutinized by the BDSF.
Compensation of Current and Savings Depositors:
The total number of current and savings deposit accounts was 2,577 depositors with a total amount of SD 518 million.
The Fund paid out a total amount of SD 72,426,108.9 to the liquidator to compensate 2,280 depositors, representing 88.5% of all depositors.
Those who were entitled to full compensation were 1,841 depositors, representing 71.4% of total depositors, whereas those who were partially compensated according to the maximum coverage limit (SD 100,000) were 439 depositors, representing 17.1% of total depositors.
Meanwhile, 297 depositors were excluded from compensation according to the BDSF Law, representing 11.5% of all depositors. These included governmental institutions, members of boards of directors, and borrowers.
Compensation of Investment Account Holders:
The total number of investment accounts was 200 accounts with a total amount of SD 1,166 million.
A total of 195 depositors were compensated, representing 97.5% of total investment account holders. The maximum coverage limit for investment accounts was SD 25,000.
Only five depositors were exempted from compensation according to the reimbursement regulation, including one governmental institution and four members of the Board of Directors.
The table below shows that investment accounts holders were reimbursed a total amount of 77.3 million dinars:
| Item | Amount | No. of Compensated Accounts | Percentage |
|---|---|---|---|
| Current and savings deposits | 72.4 | 2,280 | 88.5% |
| Investment Deposits | 4.9 | 195 | 97.5% |
| Total | 77.3 | 2,475 | - |