About the Virgin Islands Deposit Insurance Corporate (VIDIC)

Deposit Insurance is a system that is established by the Government of the Virgin Islands, to provide protection for depositors against the loss of insured deposits placed within member institutions (banks), in the event of the failure of a member institution. It represents an integral part of the territory’s financial safety-net structure. Apart from the external influences that any bank failure may have on the jurisdiction, it is imperative to protect the domestic deposit base from the effects of such a failure as this has adverse effects on the health of the BVI Economy. Deposit protection arrangements serve to mitigate these risks faced by depositors in the unlikely event of such a failure. Increases in deposit insurance coverage and strengthening of funding arrangements help support financial stability in many jurisdictions.

The principal objectives of the Corporation are to:

  • Establish and manage a system for the insurance of deposits or parts thereof against the risk of loss.
  • Promote and contribute to the stability of the financial system in the Virgin Islands;
  • Pursue the objects set out for the benefit of persons having deposits with member institutions and in such a manner as will minimize the exposure of the Corporation to loss.

The VIDIC is governed by a six-member Board of Directors from the public and private sectors, and an external director.

These include the CEO of VIDIC (ex-officio director), the Managing Director of the Financial Services Commission or their nominee (director), and four other directors appointed with the approval of Cabinet by the Minister, including one external director and one non-executive Chairman.

 

Functions of the Virgin Islands Deposit Insurance Cooperation include:

  • To provide, insurance against the loss of deposits.
  • To manage and administer the fund or any other income of the Corporation.
  • To levy premiums for the fund and fees or other amounts payable.
  • Sensitise consumers on the Corporation’s role and the rights of depositors in the event of failure of an insured institution.

VIDIC works in tandem with BVIFSC by co-monitoring member institutions, promoting prudent risk management, administering the deposit insurance system which compliments BVIFSC’s role in contributing to the stability of the BVI financial system.

VIDIC strengthens the BVI’s financial safety-net system, as it is equipped with a vast number of early intervention tools that minimise or prevent financial systemic failure. As outlined in the VIDIC Act, VIDIC powers include the ability to expense assets, the ability to make loans or advances with security to member institutions, the ability to acquire, hold or dispose of shares in a member institution, the ability to make any investment and enter into any transaction necessary or desirable for the financial management of VIDIC. Once a member institution is deemed non-viable, BVIFSC would notify VIDIC, which has the ability to assume control of the member institution, establish a bridge institution to restructure or liquidate the member institution to implement a least-cost resolution.

 

All deposit taking financial institutions that are licensed under the Banks and Trust Companies Act 1990, are deemed to be member institutions of the VIDIC. Membership is mandatory in accordance with Section 23(3) of the Virgin Islands Deposit Insurance Act 2016.