The law provides for the establishment of a deposit insurance system, receivership and liquidation of deposit taking institutions and establishment of the Kenya Deposit Insurance Corporation.
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· This Act provides for the establishment of a deposit insurance system and for the receivership and liquidation of deposit-taking institutions, to provide for the establishment of the Kenya Deposit Insurance Corporation.
· Section 20 of the Act establishes the Deposit Insurance Fund from which funds shall be used to meet payments in respect of insured deposits. All institutions licensed by the Central Bank are members of the Fund and make contributions. The Fund is meant to reduce instances of bank runs to protect depositors’ interests and thus ensure financial stability
