What is Deposit Insurance

Deposit Insurance 

What happens when a bank or deposit-taking financial institution fails?

Persons who hold deposits with that institution risk losing some or all of their money. This can have a significant negative impact on livelihoods and businesses, and also the stability of the financial sector.

The uncertainty facing depositors during a bank failure can lead to a run on the failing bank, as well as on other financial institutions in the country. Deposit Insurance minimizes these uncertainties and risks by guaranteeing the reimbursement of part or all of the depositor’s funds held with the failing bank.

In the event of the failure and liquidation of a deposit-taking financial institution, the Deposit Insurance Corporation will reimburse insured depositors up to a limit of two million Guyana dollars ($2,000,000), within 30 days after the entry into liquidation.

How It Works 

Deposit Insurance is implemented under a Deposit Insurance Scheme which consists of two components:

  • the Deposit Insurance Fund
  • the Deposit Insurance Corporation

The Deposit Insurance Fund (DIF) refers to money that is specifically dedicated for reimbursing depositors and providing financial assistance in the resolution or winding up process of a failed financial institution. The Fund will be financed mainly through the payment of premiums by deposit-taking financial institutions which are members of the Scheme.

The Fund aims for a target size of 5% of the total industry’s value of insured deposits within 10 years of its establishment. However, this target is flexible and can be adjusted based on the assessed needs of the Scheme.

The Deposit Insurance Corporation (DIC) is responsible for managing the Fund consistent with international best practices.


The Deposit Insurance Scheme provides coverage to all eligible depositors who have deposits with member financial institutions.

A deposit refers to money paid into a bank or other deposit-taking financial institution which the depositor will be repaid (with or without interest) either on demand or at a time or in circumstances agreed upon by the relevant parties. Generally, chequing accounts (or demand deposits), savings deposits and time deposits (or certificates of deposit) are covered by deposit insurance.

However, in keeping with international best practice, there are certain deposits which are ineligible for coverage:

  • deposits of financial institutions, including insurance companies and pension funds
  • deposits of central and local government authorities,
  • deposits of overseas branches of financial institutions,
  • deposits of the Board (their relatives and other affiliated persons) of a failed financial institution
  • deposits of shareholders (and their relatives and other affiliates acting on their behalf) who own 5% or more of the failed financial institution
  • deposits of persons under criminal investigation including individuals suspected of engaging in money laundering or terrorist financing.

Under the Scheme the maximum compensation per depositor per financial institution is two million Guyana dollars ($2,000,000).


The Deposit Insurance Corporation is required by law to reimburse all insured depositors within 30 days after the liquidation process for the failed financial institution has begun. The liquidation process is considered to have started with the issue of a winding up order from the High Court.

The Corporation will write to affected depositors informing them of their bank’s failure and the arrangements for reimbursement. The Corporation will also communicate to depositors via. newspapers, this website or other suitable communication channels.

The reimbursement or compensation amount for each depositor is calculated by adding up his/her deposits in the failed financial institution. Deductions may be made from this amount for a depositor who has a loan account, which is in arrears, with the failed financial institution. The depositor will be reimbursed the balance subject to the insurable limit of $2,000,000 which includes accrued interest up to the point of liquidation.

Reimbursement of foreign currency deposits will be made in Guyana dollars at the exchange rate set by the Bank of Guyana on the date of the financial institution’s entry into liquidation.

The reimbursement may be paid directly to depositors by cash or cheque, or through a payment agent in cash or electronic form or other approved payment method.

Depositors will be asked to provide an acceptable form of identification in order to collect reimbursement.