A new Deposit Guarantee Fund for Central Africa was launched Monday in Yaounde.  Restoring the credibility of the banking system and sustaining public trust in the functioning of banks was the focus of a meeting of the Banking Commission of Central African States, COBAC that held in Yaounde, yesterday, February 21. After the meeting that saw the participation of the heads of professional banking associations in the six CEMAC member countries, COBAC’s President and Governor of the Bank of Central African States, BEAC, Lucas Abaga Nchama announced the creation of a Deposit Guarantee Fund for Central Africa, FOGADAC.

“The Fund will restore the trust of the public, promote the rate of use of banking services and protect clients’ deposits in banks that go bankrupt,” said Lucas Abaga Nchama who also announced the appointment of Gabonese-born Diane Mamalepot as pioneer permanent secretary of FOGADAC.

FOGADAC is COBAC’s solution to the loss incurred by bank customers during bank failures. It was referred to as a system of insurance for bank deposits whose role is to pay back savings, deposits and other assets placed in banks when they go bankrupt. According to COBAC’s Secretary General, Idriss Ahmed Idriss, FOGADAC is a solidarity and sub-regional fund that covers losses incurred by clients in any of the six CEMAC states. “In repaying, FOGADAC will give priority to small clients whose compensation does not exceed FCFA 5 million,” Idriss Ahmed Idriss further said.

FOGADAC will be funded by minimum contributions of FCFA 30 million per bank while financial institutions not legally allowed to collect deposits will contribute FCFA 5 million each. The COBAC officials also said banks have up to May this year to pay their contributions for FOGADAC to go operational immediately.