The Deposit Protection Corporation has increased the guarantee amount for all the eligible depositors of banks from Rs. 250,000 to Rs. 500,000.

The decision was made by the members of its board in their meeting on 6 September.

This increased guarantee amount now provides full protection to 95 percent of the eligible depositors. The main objective of the deposit protection scheme is to safeguard the depositors’ interests and enhance their trust in Pakistan’s banking sector.

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

All the 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, will compulsorily be member institutions of the corporation and liable to pay the prescribed premium.

The Deposit Protection Corporation (DPC) collects premiums from member institutions as empowered by the DPC Act, 2016, and manages the received funds separately for both Islamic and conventional premiums.

Source: Pro Pakistani