The idea to establish a national institution for deposit insurance was discussed in the Central Bank of Sudan at the beginning of 1980s of the last century.

It was developed into a draft law presented to the Council of Ministers which gave its preliminary approval and sent it back for redrafting.

When Sudan applied Islamic laws in 1983-1984 and it was decided to Islamize the banking system, attempts were made to amend some articles of the draft in order to cope with the new laws. Then the initiative was halted until the conversion of the banking system was completed.

In October 1991 the idea was resurfaced and a committee was formed in the Central Bank of Sudan comprising representatives of commercial Banks and insurance companies, in order to establish an institution for deposit insurance in accordance with Islamic principles.
‏The Committee presented a study stressing the importance of establishing an institution for deposit insurance.

The study was reviewed by the senior monetary and financial authorities and then presented to a public seminar in January 1993. Subsequently the legal Department of the Central Bank of Sudan was added to the membership of the committee in order to transform the study into a draft law based on the observations and comments provided by different parties, including the Ministry of Finance, the Shari'a High Supervisory Board of the Banking system, and the financial institutions.
‏These are, in brief, some of the main steps and efforts that led to the establishment of the Bank Deposit Security Fund (BDSF) in the Sudan and brought it into existence with the approval of BDSF Act by the President of the Republic in February 1996.