A new Retail Deposit Guarantee Scheme has been announced by the Reserve Bank, for the retail segment and will be ending on October 12.

The bank has also said that the scheme has been able to solve its purpose and that now depositors will have to assess the risks, returns and the full amount of credit that is getting associated with retail.

And this is good said Governor Alan Bollard as the sector is very vulnerable and that it calls for better and careful calculations. That is the reason why the ratings are important and they should be done in a proper manner.

On the other hand, the deposit scheme is being handled by the New Zealand Treasury and will be covering all forms of retail deposits. The scheme became popular and that it why it was extended to many companies and also New Zealand-registered banks.

As part of the scheme, retail companies are given credit. It also helps in building societies, credit unions and finance companies, so that more growth can be seen in the sector.

However, it is just a temporary measure and there is no substitute for efficient functioning.