Deposit Insurance Fund of Kosovo (DIFK) is an independent public institution established in June 2011 under the Law on The Establishment of a Deposit Insurance System for Financial Institutions in Kosovo (Law No.03/L-216) with the objective to protect small depositors from loss in the case of license revocation and closure of a bank, as well as to support the Central Bank of the Republic of Kosovo in meeting its objective to foster the soundness, solvency and efficient functioning of a stable, market-based financial system.

DIFK’s main mandate is to insure deposits of natural and legal persons in each member institution and compensate insured deposits within thirty (30) days in case of a bank failure as per insurance limits and criteria defined in the Laws on Deposit Insurance. DIFK manages the compensation process of insured depositors when the Central Bank of the Republic of Kosovo (CBK) revokes the license and closes a bank.

As a narrow mandate (“paybox”) scheme, additional responsibilities of DIFK include: setting and collection of insurance premiums; investment of collected funds; cooperation with the Central Bank of Kosovo and other deposit insurers. DIFK applies risk-based premiums system based on the examination ratings provided by the supervisors with insured deposits as assessment base.

The establishment of the “ex-ante” scheme has been initiated by the Central Bank of the Republic of Kosovo with the support from the German Government (through KfW) and Government of the Republic of Kosovo in providing capital contribution in amount of EUR 15.5 million. In addition the German Government (through KfW) provided additional contribution of EUR 2 million in support of the coverage increase.