The core functions of the DIB as provided for in the Banking and Financial Institutions Act, 2006 are:
1. Assessment and Collection of Premiums
DIB levies and collects premium from banks and deposit taking financial institutions. Premium assessment is computed once annually by multiplying the premium rate of 0.15% by the average of the bank or financial institution total deposits liabilities during the period of twelve months prior to the date of premium contribution notice. Once assessed, the premium is payable within 21 days from the date the notice is served to the bank or financial institution.
2. Fund Management
DIB is responsible for management of the Deposit Insurance Fund (DIF). The DIF obtains its funds mainly from two sources namely premium contributions from banks and financial institutions and interest income from investments. The resources are mainly invested in the securities guaranteed by the Government of United Republic of Tanzania(URT) i.e Treasury Bills and Bonds. The investments are based on the available maturities under the terms provided for in the DIB’s Investment Policy.
3. Reimbursement of Insured Deposits
The DIB reimburses depositors their insured deposits in the event of failure of a bank or financial institution. Currently insured deposits are covered to the tune of TZS 7,500,000.00 equivalent to about USD 3,250.00 per depositor per bank. The current limit of TZS 7,500,000 full covers 97.1 percent of total number of insurable deposit accounts. Effective reimbursement of the insured deposits enhances public confidence in the banking system thereby contributing to financial stability in the country.
Normally, the reimbursement of the insured deposit is done by DIB with the support of BOT through head offices of the closed banks. With the exception of FBME Bank Limited, the payout exercise of the other six banks under liquidation is carried out by Tanzania Commercial Bank Plc (formerly TPB Bank Plc) through its countrywide network of branches under a Payout Agreement between DIB and TCB Bank Plc