The International Monetary Fund (IMF) has released a technical assistance report highlighting key recommendations to strengthen financial sector stability in the Kingdom of Eswatini. The report focuses on enhancing regulations and establishing a Deposit Protection Fund (DPF) to protect bank depositors in case of a bank failure.

One of the primary recommendations from the IMF report is the establishment of a well-funded and efficient DPF to safeguard bank depositors. The fund would act as an insurance policy, ensuring consumer confidence and providing quick and automatic compensation to protected depositors in the event of a bank failure.

The report emphasizes the importance of establishing a clear policy and legal basis for the DPF and recommends close monitoring of the liquidation process for failing banks by appointing curators with clear powers and procedures.

Furthermore, the IMF report suggests strengthening regulations around liquidating retirement funds and insurers to protect consumers and ensure compliance with consumer protection requirements. It recommends enhancing the liquidation regulation and powers for appointed curators to ensure a streamlined resolution process and protect the interests of depositors and other stakeholders.

The report also highlights the need for a clear agreement between the Central Bank of Eswatini (CBE) and the Ministry of Finance regarding emergency funding for the DPF in case of a bank failure. It stresses the importance of avoiding conflicts of interest and maintaining confidentiality in managing the DPF.

Overall, the IMF’s technical assistance report underscores the importance of establishing robust regulatory frameworks and effective mechanisms to protect consumers and ensure financial sector stability in Eswatini.