AIRLINK 63.30 Increased By ▲ 1.10 (1.77%)
BOP 6.13 Decreased By ▼ -0.10 (-1.61%)
CNERGY 4.88 Decreased By ▼ -0.11 (-2.2%)
DFML 14.80 Decreased By ▼ -0.10 (-0.67%)
DGKC 67.34 Decreased By ▼ -1.65 (-2.39%)
FCCL 17.46 Decreased By ▼ -0.27 (-1.52%)
FFBL 25.00 Increased By ▲ 0.40 (1.63%)
FFL 9.18 Decreased By ▼ -0.03 (-0.33%)
GGL 10.25 Increased By ▲ 0.35 (3.54%)
HBL 108.12 Decreased By ▼ -0.38 (-0.35%)
HUBC 116.89 Increased By ▲ 0.39 (0.33%)
HUMNL 6.63 Decreased By ▼ -0.07 (-1.04%)
KEL 4.42 Decreased By ▼ -0.04 (-0.9%)
KOSM 4.65 Decreased By ▼ -0.07 (-1.48%)
MLCF 35.95 Decreased By ▼ -0.95 (-2.57%)
OGDC 123.00 Decreased By ▼ -0.30 (-0.24%)
PAEL 22.76 Increased By ▲ 0.32 (1.43%)
PIAA 23.89 Increased By ▲ 1.67 (7.52%)
PIBTL 5.74 Decreased By ▼ -0.01 (-0.17%)
PPL 111.30 Increased By ▲ 0.40 (0.36%)
PRL 27.56 Decreased By ▼ -0.01 (-0.04%)
PTC 15.25 Increased By ▲ 1.06 (7.47%)
SEARL 52.95 Decreased By ▼ -0.30 (-0.56%)
SNGP 63.40 Decreased By ▼ -0.35 (-0.55%)
SSGC 10.85 Decreased By ▼ -0.15 (-1.36%)
TELE 9.22 Increased By ▲ 0.27 (3.02%)
TPLP 10.90 Increased By ▲ 0.17 (1.58%)
TRG 71.30 Increased By ▲ 1.00 (1.42%)
UNITY 24.80 Increased By ▲ 0.60 (2.48%)
WTL 1.38 Increased By ▲ 0.02 (1.47%)
BR100 6,751 Increased By 52.9 (0.79%)
BR30 22,646 Increased By 28.2 (0.12%)
KSE100 65,503 Increased By 612.1 (0.94%)
KSE30 21,721 Increased By 185.1 (0.86%)

KARACHI: The Deposit Protection Corporation (DPC) has announced enhancement in the guarantee amount for all eligible depositors of the bank by 100 percent, ie, to Rs0.5 million. With this move some 95 percent of the eligible depositors are now fully protected.

The objective of the DPC is to compensate the small and financially unsophisticated depositors to the extent of protected deposits in the unlikely event of a bank failure.

Previously, an amount of Rs250,000 per depositor per bank was determined by DPC as the guarantee amount, also referred to as protected amount or protected deposit, for the protection of eligible depositors.

In order to enhance depositors’ confidence and support financial stability, the board members of the corporation, in their meeting held earlier this month, has decided to increase the guarantee amount 100 percent.

DPC has decided to enhance the level of protected deposit from Rs. 250,000 (Rupees Two Hundred and Fifty Thousand) to up to Rs. 500,000 (Rupees Five Hundred Thousand) per depositor-per bank with immediate effect. All banks are advised to bring these changes into the notice of their staff and depositors on priority basis.

This enhanced guarantee amount now provides full protection up to 95 percent of the eligible depositors. The main objective of the deposit protection scheme is to safeguard depositors’ interest and further enhance their trust in the country’s banking sector.

SBP launches deposit protection mechanism for banking companies

Deposit protection facility is applicable to all the eligible depositors and does not require any further subscription or registration of depositors. The guarantee amount or protected deposit becomes payable to eligible depositors only if the State Bank of Pakistan (SBP) declares a bank as a failed bank and is not payable under any other circumstances.

In addition, all banks were advised to install/update “Single Depositor View” (SDV) database. Consequent to the enhancement in the amount of protected deposit, banks are advised to use new guarantee amount in their SDV database for future reporting.

DPC is a wholly-owned subsidiary of the SBP established under the DPC Act 2016. The corporation commenced its business with effect from June 01-2018.

The DPS is playing a key role in promoting financial stability by sustaining confidence in the banking system. It is being governed by an independent and professional board of directors under the Chairmanship of Deputy Governor of SBP.

All banks scheduled under subsection (2) of section 37 of the State Bank of Pakistan Act, 1956 (XXXIII of 1956), unless exempted or excluded by the Board, shall compulsorily be member institutions of the Corporation and liable to pay the prescribed premium. DPC collects premiums from member institutions as empowered by the DPC Act 2016 and managed the received funds separately for both Islamic and conventional premium.

The DPC steps forwards in the unlikely event of bank failure as notified by the SBP and compensate its depositors up to the amount as prescribed within 30 days after the notification after adopting the approved procedure of reimbursement.

Copyright Business Recorder, 2021

Comments

Comments are closed.