The Minister of Finance, Colm Imbert, has advised that on August 28, 2024, he signed both the Central Bank (Deposit Insurance) Order, 2024 and the Central Bank (Deposit Insurance Coverage Limited) Order, 2024, which were both published on August 29, 2024 as Legal Notice Nos. 159 and 160 of 2024, respectively.
Significantly, both Orders will take legal effect on October 1, 2024 and are based on careful consideration of funding reviews and assessments, international best practice and consultations with the Central Bank of Trinidad and Tobago and financial sector stakeholders.
The Minister said this adjustment is considered to be in the public interest and is intended to provide a further level of protection for persons who deposit their savings in financial institutions.
The Central Bank (Deposit Insurance Coverage Limited) Order, 2024, increases deposit insurance coverage from TT$125,000 to $200,000. This increase in coverage will benefit all depositors and aid to:
(i) align coverage levels with the IMF’s recommended ratios for coverage of 1-2 times GDP per capita. The existing coverage limit, as a ratio of GDP per capita, equates to 0.89 (<1). Therefore, an increase in the coverage limit to TTD $200,000 will increase the ratio to 1.42; (ii) compensate for inflationary pressures, which have cumulatively impated the real purchasing power of depositors. Notably, the Retail Price Index was impacted by 49% over the period 2015 to 2022, resulting in a deficit of $61,250 per maximum eligible covered deposit at the sustained coverage level and (iii) maintain and surpass alignment with best practice, that is, the Internationalk Association of Deposit Insurers' recommended coverage ratios of 90.95% for the number of accounts and 20-30% on the value of accounts. The change in coverage levels increases protection from 94% to 96% on all eligible number of deposit accounts and increases the aggregate value of insured deposits from 23%to 33% held at licensed Financial Institutions.