Frequently Asked Questions
Deposit Protection Fund
- What is Deposit Protection Fund Board (DPFB)?
DPFB is a corporation established under Section 36 of the Banking Act, Chapter 488 of the Laws of Kenya as a deposit insurance scheme to provide cover for depositors and act as a liquidator of failed member institutions.
- What is the role of DPFB in the financial system?
It is cover that safeguards depositors against loses they would otherwise incur if a bank or deposit taking institution closes.
- What is a Deposit Insurance Scheme?
It is a cover that safeguards depositors against loses they would otherwise incur if a bank or deposit taking institution closes its operations. The scheme was established in Kenya in 1985.
- Who manages DPFB?
DPFB is a public institution managed by a Board comprising the Governor of the Central Bank of Kenya as the Chairman, the Permanent Secretary to the Treasury and five other members who represent the interests of the member institutions.
- What is a member institution?
A commercial bank, non-bank financial institution, a building society, or a deposit taking microfinance institution licensed under the Banking Act. Currently, member institutions comprise of forty three (43) commercial banks, two (2) non bank financial institutions and one (1) deposit taking microfinance institution.
- How does DPFB protect a depositor of a member institution?
A depositor is guaranteed payment of a maximum of Kshs 100,000.00 in case of failure of a member institution. Currently, the guaranteed payment covers over 90% of the total number of depositor's accounts in Kenya.
- How does a depositor recover deposits in excess of the insured amount of Kshs 100,000.00?
This is paid as liquidation dividend after the liquidator has recovered sufficient funds from the sale of the institution’s assets and recovery of debts.
- Who pays the insurance premium?
The member institution pays the premium to the DPFB at no cost to the depositor. The premiums received by DPFB constitute the Fund.
- Which deposits are insured by DPFB?
These are deposits in current accounts, savings accounts and time/fixed deposit accounts.
- I am a non resident of Kenya, are my deposits held with member institutions in Kenya insured?
Yes, your place of residence or nationality does not matter.
- What if I have several accounts in the same institution?
All accounts of each depositor in an institution are consolidated and paid up to the maximum insured sum of Kshs 100,000.00
- In the event that a joint account exists in addition to individually owned account in the same insured institution, is each account separately insured?
A joint account is considered as being distinct from individually owned accounts and therefore insured separately.
- Are accounts held in trust, executor, guardian or custodian insured separately from an individual's account?
Yes, these are treated as distinct from individually owned accounts and therefore insured separately.
- Are creditors of institutions insured?
No. However, they are entitled to participate in the payment of liquidation dividends.
- Is an account held by a limited liability company or a partnership insured separately from the individual accounts of shareholders or partners of those entities?
Yes, these are different entities and they are treated separately for purposes of insurance.
- What happens if my bank is 'bought out' or merged with another member bank?
The deposit insurance coverage is retained in the name of the new institution.
- What happens when a member institution fails?
DPFB publishes notices informing the public of the institution's failure and advises depositors on the claim procedures. Depositors are required to fill and lodge claim forms with DPFB in order to facilitate prompt payment of the insured deposit up to a maximum of Kshs 100,000.00.
- How many institutions are currently under liquidation by DPFB?
Twenty (20) institutions are currently under liquidation.