Enforcement schemes for partial deposit insurance system announced

The government confirmed the implementation of the partial deposit insurance system starting January next year as originally planned. A financial institution¡¯s ceiling for the partial deposit insurance system per person was sharply upgraded to 30 million won-70 million won from the original 20 million won.

The Ministry of Finance and Economy announced enforcement schemes for the partial deposit insurance system on Friday. The ministry had internally confirmed that the ceiling of the system would be set at 50 million won per person but did not announce this in detail, as it is awaiting final consultations between the government and the ruling party.

According to the enforcement schemes, out of demand deposits, 0% interest bearing temporary deposits and deposits for settlements will be reviewed for full insurance coverage. However, the ceiling of the partial insurance system will not be differentiated according to financial institutions. The director of the financial policy bureau of the MOFE revealed that considering the current situation of the financial market, the stability of depositor sentiment is most important. Consequently, the bureau will increase the ceiling of the partial insurance system from 3 times the amount of the GDP per capita to 7-8 times, corresponding to 30 million won-70 million won.

In this regard, the government and the ruling Millennium Democratic Party will meet on Oct. 17 for final consultations, and the deposit insurance law will be amended within this year to be implemented starting January next year.