DIC 25th Anniversary
“Celebrating 25 Years”: General Manager’s Remarks
- Senator, the Honourable Minister of Finance Mr. Larry Howai,
- The Permanent Secretary in the Ministry of Finance, Ms. Allison Lewis
- Chairman of the Board of Management of the Deposit Insurance Corporation- Mr. Jwala Rambarran
- Directors of the Board of Management of the Deposit Insurance Corporation
- Deputy Governor of the Central Bank, Dr. Shelton Nichols
- Specially invited guests
- Members of Staff of the Deposit Insurance Corporation
- Members of the media
- Ladies and Gentlemen
Good evening, on behalf of the Deposit Insurance Corporation,
welcome to our ever so slightly delayed anniversary celebration
of 25 years of successfully providing deposit insurance protection to the
citizens of Trinidad and Tobago. As we celebrate this milestone, it is of
importance not only to the DIC but also to the financial sector and the nation as a whole.
As we briefly reflect on the history of the Corporation,
the journey which started in 1986, like the beginnings of so many other
Deposit Insurers around the world, began in financial crisis.
There were two primary objectives for the establishment of the DIC
– to support consumer confidence and to support financial stability.
These two objectives are intimately related.
A fear about the security of deposits can result in panic leading to a run on deposit institutions.
The establishment of the DIC in 1986 to deal with four failed financial institutions and
provide deposit insurance to depositors of these institutions removed the fear of loss of savings.
By 1993 the DIC took the responsibility for four more failed institutions and was able to fulfil
its mandate of payout to the depositors. Since 1986 the Corporation has paid out $223.1 million
dollars to 14,758 depositors of nine failed financial institutions.
The outset of its journey has not been without discomfort, for the Deposit Insurance Fund,
in order to start up in 1986, was forced to finance itself in the form of a
loan from the Central Bank. This was finally settled in December 2002.
Against the backdrop of its clear objectives the growth of a deposit insurance fund
to instil confidence was a critical function of the Corporation since inception.
Under the astute policy guidance of its five former Chairmen and the operational leadership
of its three former and the present General Managers the Fund grew, surpassing the billion dollar
mark in 2007, as at September 30th, 2011 the Fund stood at $1,782.3 million. Tonight
I can say it is expected to surpass $2 billion under management within the next quarter.
Over the years the corporation has strategically invested in technology designed to
enhance its capability to make payouts to depositors far more efficiently and performed
in the shortest time should a member institution fail. This has seen the development
of a Loans Management System, and the implementation of an automated Insurance Payout System.
As a responsible member of the financial safety net the DIC has been mindful of balancing
the need for depositor confidence with the concern of moral hazard. Unlike other
parts of the world where the loss of consumer confidence leads to 100 percent deposit
coverage, the Corporation only on two occasions has increased the coverage limits consistent
with the growth in deposit levels. This balancing act has resulted in the coverage limit
been moved from $50,000 for each depositor in three different rights and capacities for each member
institution to $75,000 in 2007. Today the coverage limits stands at $125,000. Using
insured deposits to total deposit ratio analysis, at this coverage limit just under 94% of depositors
in the 25 member institutions are covered by deposit insurance up from just over 90% of depositors in
1986. Today just less than 29% of the value of deposits is protected throughout system by deposit insurance .
One of the roles the DIC can perform under the Act governing its operations is the
liquidation of member institutions. Since inception the Corporation has been appointed
by the Court liquidator of nine financial institutions.
The DIC as the depositor insurer in the safety net plays its part in improving the
financial literacy of our banking public. In this regard the corporation has carried
out training programmes for the staff of member institutions and also actively
participated in the National Financial Literacy Programme as part of a
collaborative effort with the Central Bank.
Both regionally and internationally, the DIC has achieved several note worthy
accomplishments, not the least of which includes becoming a founding member of
the International Association of Deposit Insurers (IADI) at its launch in Basel,
Switzerland in 2002. This has provided the Corporation with a voice on issues
relating to deposit insurance in the international forum. That voice is given
additional weight as the DIC presently holds the Chairmanship of the Caribbean Regional
Committee and sits on the Executive Council of IADI.
This evening as we reflect on the vision of the financial and
political leaders in 1986, certainly it can be argued that they
saw the need and value of such a safety net player long before
the idea found expression in other jurisdictions. As such,
Trinidad and Tobago was the first country in the English speaking
Caribbean to create a deposit insurance fund and the second among
the Association of Caribbean States.
None of what the DIC has been able to
accomplish over the last 25 plus years would have been
possible without the dedication and commitment of the staff, both
past and present, many of whom are here with us this evening.
A few members of our staff here tonight have been with the organisation
from its inception and all staff members have given yeoman service
throughout the years. The DIC’s caring staff, have, without exception,
when called upon, repeatedly risen to every occasion, it has been all hands
on deck, working long hours for weeks on end in whatever capacity required,
from manning phones and reassuring desperate depositors to doing whatever else
was necessary to get the job done. Their commitment to the organisation has been
the lynchpin upon which this small operation has rested throughout the years.
To you past members and to my staff presently, from a most grateful organisation, thank you.
Therefore as we celebrate the passage of our first
25 years of providing deposit insurance to the
citizens of Trinidad and Tobago, rest assured that the
DIC will continue to forge ahead and maintain the confidence
of depositors in member institutions and in so doing contribute
to stability of the local financial sector, not merely by
labouring in our own vineyard, but by working with our safety net partners,
other regional and international organisations to fulfil our designated role –
to ensure and reassure the citizens of this country, that the confidence
which they place in the stability of our financial sector remains intact.
Ladies and gentlemen I thank you for coming and sharing this occasion us. Thank you.