Guarantee Limits Increased: New Deposit Protection Measures by Central Bank in Response to Inflation
Amid preparations for the upcoming XXL weekend, the board of directors of the Central Bank held its weekly meeting earlier than usual and made a significant adjustment to the guarantee limits for bank deposits. Deposits made in pesos are now covered up to $50 million, while deposits in foreign currency are covered up to US$100,000. This update was made official in Communication A 7985 and is primarily a response to inflation. The last time these limits were updated was in December 2022 when deposits in pesos were guaranteed up to $6 million, representing a 733% increase from the previous insured amount.
The deposit guarantee insurance system provides essential protection for depositors in the banking system by ensuring the safety and security of their funds. This measure helps to maintain trust and confidence in the financial sector, ultimately benefiting both depositors and financial institutions alike. The insurance is applied per depositor and per entity, covering bank deposits, savings accounts, and checking accounts in case a bank closes or changes ownership.
The deposit guarantee insurance system was established in Law 24,485 and regulated in April 1995 by decree 540. Sedesa, a company owned by the Central Bank and financial entities, provides this insurance. Financial institutions contribute to the Deposit Guarantee Fund based on the capital they receive with the goal of having enough funds to respond to any risks for depositors. As of March 21st, the fund balance was $3,344,653,160,951. This insurance covers deposits in current accounts, demand accounts, savings accounts, fixed terms
