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Insurance for credit union depositors


The long wait by thousands of credit union members for a savings protection guarantee scheme will be over in a matter of months.

Minister of Finance Chris Sinckler said the draft of the legislation to establish the scheme was undergoing final changes and should be “in the hands of all the industry players” for comment before December.

Likewise, he said he was expecting the bill to go before Parliament for approval “before the Christmas break”.

The deposit insurance fund would provide protection for credit union members up to a certain amount if a credit union fails.

Commercial banks currently have a similar measure in place, which protects every account holder up to $25,000.

Responding to questions during the  Barbados Chamber of Commerce and Industry (BCCI) “sit down” business luncheon, on Tuesday, Sinckler said the scheme for credit unions would “follow very closely” that of the commercial banks.

“But, of course, we will have some nuance changes because credit unions operate (in) a slightly differently environment under the Cooperatives [Societies] Act, but it is pretty much ready to go,” said Sinckler.

“The last draft I saw, there weren’t many significant changes being suggested by the drafters. Therefore, I see no reason why it should not be in place certainly long before this time next year,” he added.

Earlier this year, Chief Executive Officer of the Financial Services Commission (FSC), Randy Graham, gave the assurance that the legislation could be in place by the end of this year.

At the time, Graham said the FSC and the Central Bank had already looked at the funding requirements and were “actively hoping to have that in place in short order, as soon as we get the legislative framework for the deposit insurance”.

There are currently 35 credit unions in operation in Barbados with total assets of about $1.94 billion. (MM)


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