BB moves to double banks’ deposit insurance

Atiur

Bangladesh Bank (BB) has moved to amend the Bank Deposit Insurance Act 2000 to double bank’s coverage for depositors’ funds, Governor Atiur Rahman said yesterday.

“We have recently sent a proposal to the finance ministry in this regard,” he said at the inaugural of the Information for Deposit Insurance Premium Assessment software at the central bank.

The software was developed by engineers of the central bank to digitise the calculation of insurance premium instead of a manual system.

The regulator has proposed to double the deposit coverage from the current Tk 1 lakh per depositor to Tk 2 lakh for the same.

“If the new law is approved, depositors’ money will be better protected and the financial sector will be strengthened,” Rahman said.

Non-banking financial institutions will fall under the purview of the new deposit insurance law, he said.

The deposit insurance scheme was introduced in Bangladesh in 1984 to minimise the risk of loss of funds deposited with banks. In accordance with Bank Deposit Insurance Act 2000, premium collected from the insured banks and all other receivables are put in an account called the Deposit Insurance Trust Fund, maintained at the Bangladesh Bank.

According to the scheme, premium rates depend on the performance of the banks. Problem banks pay 0.10 percent premium, banks under early warning system 0.09 percent and the rest of the banks are required to pay 0.08 percent.

The total amount under the DITF now stands at Tk 3,661 crore, according to BB.

Earlier, the governor launched a two-day training programme for economic reporters at the BB, co-organised by Economic Reporters’ Forum and the central bank.

Rahman hoped the training will help reporters write fact-based objective reports.

Biru Paksha Paul, chief economist of the BB, also spoke.