Central Bank Boosts Deposit Guarantee Limits by 733%, Strengthening Protection for Bank Depositors
The Central Bank recently updated its guarantee limits for bank deposits in preparation for the upcoming XXL weekend. Deposits made in pesos are now covered up to $50 million, while deposits in foreign currency are covered up to US$100,000. This adjustment was made official in Communication A 7985 and is primarily a response to inflation. The last time these limits were updated was in December 2022 when deposits in pesos were guaranteed up to $6 million. This current update represents a 733% increase from the previous insured amount.
The deposit guarantee insurance system is an important measure that protects bank depositors and their savings accounts from any potential risks, such as bank closures or changes of ownership. This system was established by Law 24,485 and is regulated by decree 540. Sedesa, a company owned by the Central Bank and financial entities, provides this insurance coverage.
Financial institutions contribute to the Deposit Guarantee Fund based on their capital they receive with the goal of having enough funds available to respond effectively to any risks for depositors. As of March 21, the fund balance was $3,344,653,160,951. This insurance covers deposits in current accounts, demand accounts, savings accounts, fixed terms, salary accounts and term investments.
The deposit guarantee insurance system ensures that when the stock of deposits grows so does the funding available to Sedesa. Banks are required to make monthly contributions to the fund based on their average daily deposits in both pesos and dollars which prevents potential risks from arising for depositors.
In conclusion, the deposit guarantee insurance system is an essential measure that provides protection for bank depositors in the banking system ensuring that their funds are safe and secure. It helps maintain trust and confidence in the financial sector which ultimately benefits both depositors and financial institutions alike
