DIFK signed Agreements with the Ministry of Finance for the capitalization of the Deposit Insurance Fund and reform in support of the increase in the deposit insurance limit

The Deposit Insurance Fund of Kosovo has signed loan and grant agreement with the Ministry of Finance of the Republic of Kosovo, in the amount of 23.7 million euro, to strengthen the capitalization of the Deposit Insurance Fund in support of the planned increase of the deposit insurance limit. The agreements have been concluded under the Financial Sector Development Project, which is being implemented with the support of the World Bank.

Over the past two years, DIFK, in close cooperation with Central Bank of Kosovo and the Ministry of Finance, as the key institutions of financial safety net, has undertaken the most significant reforms to the deposit insurance system since its establishment, addressing issues of major public interest. These policy reforms include increasing the deposit insurance limit per depositor per bank, based on an assessment of the current development trends in Kosovo’s banking sector and economy. Upon completion of this reform, the coverage of depositors up to the coverage limit is expected to improve to above 90%, which is the standard recommended by IADI. These reforms are expected to be implemented through the approval of amendments and supplements to the Deposit Insurance Law, as part of the financial package with the World Bank.

The financial support provided by the Ministry of Finance will strengthen the capitalization of the Deposit Insurance Fund and support the increase of deposit insurance limit, strengthening depositor protection with new legislative changes of the Law on Deposit Insurance. This process is in line with DIFK’s funding strategy to capitalize the Fund through various instruments, in accordance with European best practices.