All member banks of Deposit Protection Corporation (DPC) have been advised to acquire a state-of-the-art Management Information System (MIS) for maintaining a comprehensive depositor-wise database by June 30, 2019. The DPC was established to pay the guarantee amount to the protected depositors of a member bank in accordance with stipulations under Section 21 of the Deposit Protection Corporation Act, 2016, on a per-depositor per-bank basis. Therefore, in order to ensure that the payment of guarantee amount (reimbursement) to genuine protected depositors becomes a seamless process, the timely availability, integrity and reliability of depositors' information maintained with banks is of utmost importance.
In view to ease the process, DPC has advised all member banks to appropriately install or update their systems including software(s)/database(s) for maintaining a comprehensive depositor-wise database. "Such database must have the ability to identify, on any given date, all the accounts of any single depositor and calculate the total liability of a bank towards that depositor (including any interest/profit accrued on his/her deposits). This Management Information System (MIS) will be used by DPC in the event of reimbursement at any given cut-off date", said a DPC circular no 01/2019.
The DPC has asked all member banks to update their systems accordingly, latest by June 30, 2019 and report the compliance to DPC. Further, all member banks are advised to provide a roadmap/action plan indicating how they will progress towards above mentioned timeline; and such roadmap must be submitted to DPC latest by April 08, 2019. As per directives, the system should identify the total payable amount on the basis of total liability towards each protected depositor by applying the formula of total liability of the bank towards each depositor and the guarantee amount (pronounced by the Corporation from time to time), whichever is less.
The system should be able to generate a separate report assuming the adjustment of guarantee amount payable and can adjust and settle one or more accounts of each protected depositor by making full settlement of the smallest deposit balance first and moving to the largest deposit(s) of the same depositor. The system should also be able to update the information on daily basis and all changes and updates made in the depositors' information shall be logged. The system's readiness and efficacy should be tested at regular intervals by the relevant department(s) under the operational risk framework of each bank and also under Business Continuity Planning (BCP) exercise.
According to circular, the compliance of the instructions will be scrutinized by the internal audit of banks. SBP inspection will assess the system's readiness and compliance of the overall deposit protection framework. Moreover, in case of any eventuality, the bank should be able to generate and provide the afore-mentioned information within a maximum time period of 48 hours of the issuance of notification under Section 21 of the Act.
The banks are also required to report the position of depositors (on single depositor-wise basis) to DPC as of June 30, 2019 by July 31, 2019; and onwards on quarterly basis within one month following each quarter-end. In the system, single depositor view will be achieved, preferably by using a Unique Identification Number that, in case of individuals' accounts, should also be linked to their Computerized National Identity Cards (CNIC)/Smart National Identity Cards (SNIC)/National Identity Card for Oversees Pakistanis (NICOP).
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