1. Designation of SDIC by Minister
The SDIC is a company limited by guarantee that is designated by the Minister to be the Deposit Insurance Agency. As SDIC is a company limited by guarantee, it has no shareholders but it has members who were appointed by the Minister.
2. Scope of Responsibilities and Powers Clearly Defined
The scope of responsibilities and powers of the SDIC are clearly defined under the Deposit Insurance Act. The objectives of the SDIC are to administer the Deposit Insurance Scheme as well as to administer and manage the Deposit Insurance Fund. In regards to the Scheme, the SDIC's functions are to collect premium contributions from Scheme members, make payment of compensation to insured depositors and educate the public on the Scheme. The SDIC is vested with the powers to take any action for the purpose of discharging its functions under the Deposit Insurance Act.
3. Independent Board of Directors
Under the Deposit Insurance Act, the board of directors shall consist of a Chairman and not less than 4 but not more than 9 other directors. To avoid any conflict of interest, no person can be a director if he is a substantial shareholder, director or an employee of any Scheme member or its related corporation. The board of directors is accountable to the Minister for its acts and decisions. The salaries, fees and allowances to be paid to directors have to be approved by the Minister.
The board of directors sets the directions and the policies of the SDIC and appoints the Chief Executive Officer to be responsible for the day-to-day administration and management.
4. Accountability to the Minister
The board of directors of SDIC is accountable to the Minister for its acts and decisions. This accountability is exercised in the following manner:
- All annual estimates of income and expenditure of the Deposit Insurance Fund and the Deposit Insurance Agency are required to be presented to the Minister for approval.
- Investment of the Deposit Insurance Fund in assets other than those prescribed in the Deposit Insurance Act is required to be approved by the Minister.
- An annual report of the Deposit Insurance Agency's activities is required to be submitted to the Minister for review.
- Any amendment to SDIC's memorandum and articles of association has to be approved by the Minister.
5. Independent Audit
The accounts of the Deposit Insurance Agency and Deposit Insurance Fund are required to be separately audited by the Auditor-General. If the Auditor-General is not the auditor, then the auditor has to be appointed annually in consultation with the Auditor-General. The SDIC is required to submit the audited financial statements and auditors' report of the Deposit Insurance Agency and Deposit Insurance Fund to the Minister and the Auditor-General.
