The Deposit Guarantee Scheme (DGS) in Malta plays a critical role in maintaining confidence in the country’s banking system and preserving financial stability. It provides a safety net for depositors by guaranteeing the reimbursement of their funds up to €100,000 in the event of a bank failure. The need for deposit insurance arises from the inherent risks associated with the banking sector, such as credit, market, and operational risks, which could lead to the insolvency of a financial institution. By offering a guarantee on depositors’ funds, the DGS reduces the likelihood of bank runs and fosters trust in the financial system, thus encouraging savings and investment.
The working of the deposit guarantee scheme in Malta is anchored on the Banking Act (Chapter 371) of the Laws of Malta and the Deposit Guarantee Scheme Regulations (SL 370.12). All licensed credit institutions operating in Malta are required to participate in the DGS, which is administered and governed by the Malta Financial Services Authority (MFSA). The MFSA ensures the proper functioning of the DGS by monitoring participating credit institutions, verifying their contributions, and managing payouts to depositors when a bank is declared “unavailable.”
The organizational structure of the DGS administration in Malta is embedded within the MFSA’s overall structure. The MFSA is composed of various departments and directorates, each responsible for specific aspects of financial regulation and supervision. The DGS falls under the purview of the Banking Supervision Directorate, which oversees the prudential regulation and supervision of credit institutions in Malta. The directorate liaises with other departments within the MFSA, such as the Legal and International Affairs Department, to ensure the smooth operation of the DGS and compliance with relevant legislation and regulations.
Contact information for the DGS administration in Malta, as part of the MFSA, is as follows:
Malta Financial Services Authority (MFSA)
Triq l-Imdina Zone 1,
Central Business District
Birkirkara CBD 1010 Malta
For inquiries related specifically to the Deposit Guarantee Scheme, you may use the general contact information provided above or visit the MFSA’s website, which contains extensive information about the DGS, including relevant legislation, publications, and frequently asked questions.