DIFK and CBK Sign Memorandum of Understanding to Increase DIFK’s Mandate Efficiency

The Deposit Insurance Fund of Kosovo (DIFK) has signed a new Memorandum of Understanding with the Central Bank of the Republic of Kosovo (CBK) aimed at enhancing the exchange of information between the two Parties and ensuring access to examinations in DIFK member banks.

The main objective of exchanging information between the Parties, including examinations at member banks, is to ensure that the DIFK mandate is efficiently and effectively fulfilled. According to the Law on the Establishment of a Deposit Insurance System in Kosovo, DIFK’s mandate is to protect small depositors from loss in the event of an insured event involving the closure of a member bank in the country, and to support the Central Bank in achieving its goal of enhancing the safety, solvency and efficient functioning of a stable, market-based system.

The signed Memorandum of Understanding sets forth the continuous exchange and coordination of timely information regarding (i) the licensing of deposit-taking financial institutions, (ii) the assessment and collection of premium for member banks, (iii) early warning, (iv) the process of compensation of insured deposits during official administration, resolution , and liquidation, and (v) contingency planning. Furthermore, the memorandum addresses the cooperation in terms of examination of DIFK member banks regarding the quality of deposit/depositor data submitted by banks including other legal obligations of respective banks in relation to DIFK.

In addition, the signed Memorandum regulates the details of regular reporting under the DIFK law to the CBK focusing in addition to the Annual Report on reporting on the deposit insurance scheme, with emphasis on the adequacy of the level of deposit insurance limit and sustainability of the DIFK funding model.

This Memorandum of Cooperation addresses cooperation under the best practices of the financial safety net so drafted by the Parties under the support of FinSAC from the World Bank.

In line with its Strategic Plan, the DIFK will further work to advance processes in line with international standards for deposit insurance systems, thereby supporting the CBK in ensuring a stable financial system in Kosovo.