The Central Bank’s Board of Directors met early this week to update the guarantee limits for bank deposits. Depositors who make deposits in pesos are now covered up to $50 million, while those who deposit in foreign currency are guaranteed up to $100,000. This decision, outlined in Communication A 7985, is a response to inflation and marks the first update since December 2022. This increase in coverage represents a substantial 733% increase from the previous limit of $6 million for peso deposits.
The Deposit Guarantee Fund was established by Law 24,485 and regulated in April 1995 by decree 540, leading to the creation of Seguros de Depósitos SA (Sedesa). Sedesa is a company jointly owned by the Central Bank and financial entities represented by Caja de Valores. This insurance applies on a per depositor, per entity basis, with bank deposits guaranteed by Sedesa in case of a bank closure or change of ownership. Financial institutions contribute to the Deposit Guarantee Fund based on their average daily deposits received in both pesos and dollars. As of March 21, the balance of the fund was $3,344,653,160,951. The fund ensures coverage for various accounts such as current accounts, demand accounts, savings accounts, fixed terms, salary accounts, social security accounts and term investments.
In addition to insurance coverage, banks are required to participate preventively by making monthly contributions to the fund based on their average daily deposits received in both pesos and dollars. This allows the fund to respond promptly to any potential risks affecting depositors. Participation in Sedesa’s trust is determined based on each financial institution’s contribution relative to contributions collected from the entire Argentine banking system. Overall, this deposit guarantee insurance system provides a safety net for depositors in banks and helps maintain stability and trust within the banking sector.
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