Canada Deposit Insurance Corp. has authorized the Bank of Tokyo-Mitsubishi (Canada) to accept deposits in Canada without being a member institution, effective May 2.

Opting-out allows banks that accept primarily wholesale deposits (defined as $150,000 or more) to operate in Canada without having deposit insurance. With this latest change, CDIC membership now totals 90 institutions.

To protect depositors, a bank must give notice to all of its depositors of its intention to opt-out of CDIC membership. Customers with Canadian dollar deposits have the choice of withdrawing their funds or leaving them with the bank under express acknowledgement that they will no longer be covered by CDIC insurance.

Customers who choose to withdraw their funds receive interest owing up to the date of withdrawal. The opting-out bank is not allowed to charge any early withdrawal penalties. In the event that some customers do not select one of these options, the bank must arrange for another CDIC member institution to assume any remaining CDIC eligible deposits under their existing terms and conditions.